Due to Inflows from Foreign Investors, the Volatility Expectations of Mexican Peso Decline

The expectations of the traders for swings in the major currency of Mexico, Mexican Peso are currently holding at a 7-week low figure. The foreign investors are looking to profit from the high interest rates that pour into this Latin American country, as shown by the options. The implied volatility on options for the Mexican Peso for the last 3 months held at 9% on today. The 1.5% drop of the measure in 2013 is the biggest among the major currencies, as far as the statistics are concerned. The Mexican Peso experienced a decline of 0.3% today and it is currently at 12.1099 per USD.

In 2013, Mexican Peso has gone ahead by 6.2% and this is the biggest among the most traded counterparts of USD. The percentage of the country’s $161 billion of the outstanding Government bonds in foreign hands increased to a figure that’s the highest in last 13 years. As far as the initial estimates done by the analysts are concerned, the economy of Mexico is expected to grow by 3.5% in 2013. For US, the expected growth of economy is 2%, whereas, for Brazil, the predictions are of a 3.1% growth in economy.

According to the Currency Trader at Banco Base SA, Ramon Cordova, the foreign investors are currently seeing macroeconomic stability in Mexico. Apart from that, they are also seeing the possibility that reforms will finally be passed. Incidentally, for the last 10 or 12 years, reforms have not been approved by the Government of Mexico. Cordova added further that such sort of speculations are helping Mexican Peso to move forward as many investors feel that Mexico will soon turn out to be a hub for numerous types of foreign investments. According to Cordova, how much of these speculations turn out to be truth is something that has to be seen, still, at this point of time, things are definitely looking nice for the Mexican economy and the major currency as well.

The political rivals in Mexico have worked together for pushing through the biggest education overhaul in the last few decades. Apart from that, they have also collaboratively worked to boost the competition in the telecommunications sector. They are currently planning to consider overhauls of the tax and energy laws which are designed to boost the growth in Mexican economy.