| | |  Business News | January 2009 
Mexico's Peso Sinks to Record Low Against Dollar
 Julie Watson - Associated Press
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 |  | Mexico's central bank offered $400 million in foreign reserves to try to bolster the battered currency, but no there were no bidders. |  | | |
Mexico City - Mexico's peso dropped to a record low against the U.S. dollar Friday on concerns that new economic data signal that the global crisis is worsening.
The peso was trading at 14.4 against the greenback in the afternoon, its lowest point since the government introduced the new peso in 1993.
Markets were volatile after corporate forecasts indicated the U.S. economy may contract at a faster pace in 2009. Meanwhile new economic data showed that euro-zone unemployment edged up 8 percent in December, and disappointing earnings reports from companies like Sony and Honda led sharp losses in Japan.
"Each day we are hit with new surprises," said Omar Martin del Campo of the Mexican brokerage Ve Por Mas. "I have never seen the peso fall this much. It's historic."
The peso has lost more than 40 percent of its value against the dollar since last summer, driven by the U.S. recession.
The recession has reduced demand for Mexican goods in the United States, the market for 80 percent of Mexico's exports.
The volume of currency trading was also down with Mexico heading into a holiday weekend to celebrate its Day of the Constitution.
Mexico's central bank offered $400 million in foreign reserves to try to bolster the battered currency, but no there were no bidders.
Since last year, Mexico has auctioned off $15 billion in foreign reserves to prop up the peso - its biggest sell-off in a decade.
The world financial crisis has battered Latin American stocks and currencies in 2008, as foreign investors dumped local assets to cover losses at home and the price of key commodities fell.
Mexico's central bank has forecast negative growth for the year. |
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