Mexico’s Peso Hits Five-Month Low as President Lauds Resilience

RIO DE JANEIRO, BRAZIL – (Bloomberg) The Mexican peso fell for an eighth consecutive day Monday, its longest losing streak since 2011, taking it to the lowest since October as the coronavirus infected more people.

The peso weakened 0.7 percent as of 8:49 a.m. local time, bringing its decline in the past month to 4.8 percent, the worst performance in emerging markets after Brazil’s real. The Latin American nation has now reported five confirmed cases of coronavirus.

In a morning press conference, President Andres Manuel Lopez Obrador preferred to highlight the rally in the peso since he took office in late 2018. While he agreed that the peso has taken a hit, he said that the starting point as one of the world’s best performing currencies meant it had further to fall.

“Our economy has resisted, especially the peso,” Lopez Obrador told reporters. “It endured this first stage of coronavirus spread. There has been a depreciation, but it was already very strong.”

The spread of the virus has potential to hurt Mexico’s already moribund economy, which registered a 0.1% contraction in gross domestic product last year. Since Lopez Obrador’s election, the peso remains the third-best performing major currency, but the sixth worst year to date.

Recent declines are “a reflection of the market anticipating the virus situation in Mexico,” said Danny Fang, a New York-based strategist at BBVA.

Global coronavirus cases reached 89,000 on Monday, with the death toll rising to 3,044. Mexico reported its first case on Thursday last week.

Source: Bloomberg