The peso dropped to its lowest level for 38 months Thursday, reaching 14.50 to the dollar mid-afternoon before settling at 14.32. The Mexican currency has fallen 9.69 percent this month, easily the worst performer of the world’s major currencies.
Some U.S. financial analysts said a new opinion poll (see story page one) putting leftist presidential candidate Andres Manuel Lopez Obrador only four points behind Enrique Peña Nieto of the centrist Institutional Revolutionary Party (PRI) was a major factor in Thursday’s sell off.
The Wall Street Journal ignored the political context and attributed the continued fall of the peso to a “string of disappointing data from the U.S.” A day earlier the paper said Wednesday’s less dramatic peso fall came after fears that the focus of the Eurozone crisis is about to switch from Greece to Spain, whose troubled banks are seeking a government bailout.Mexican government officials are adamant that the peso’s current fortunes are linked to external factors and that stability will be restored once the Eurozone crisis has abated and the U.S. economy levels out.