The Dollar vs. the Mexican Peso: A 10-Year Comparison

The United States dollar (USD) and the Mexican peso (MXN) are two of the most heavily traded currencies in the world. The USD is the world's reserve currency, while the MXN is the third most traded currency in Latin America.

The relationship between the USD and the MXN has been volatile in recent years, due to a number of factors, including the global economic crisis, the US-Mexico trade war, and the COVID-19 pandemic.

Historical Exchange Rates

In the past 10 years, the USD has traded between a high of 22.43 MXN in 2012 and a low of 18.38 MXN in 2020. The average exchange rate over this period was 19.90 MXN.

The following table shows the historical exchange rates between the USD and the MXN from 2012 to 2021:

Factors Affecting the Exchange Rate

A number of factors can affect the exchange rate between the USD and the MXN, including:

• Economic growth: The strength of the US and Mexican economies can have a significant impact on the exchange rate. When the US economy is growing, demand for the USD increases, which can lead to a stronger USD relative to the MXN.
• Interest rates: The interest rate differential between the US and Mexico can also affect the exchange rate. When US interest rates are higher than Mexican interest rates, investors are more likely to buy USDs, which can lead to a stronger USD relative to the MXN.
• Inflation: The inflation rate in the US and Mexico can also affect the exchange rate. When inflation is higher in the US than in Mexico, the USD can lose value relative to the MXN.
• Political stability: Political stability in the US and Mexico can also affect the exchange rate. When there is political uncertainty in either country, investors may be more likely to buy USDs, which can lead to a stronger USD relative to the MXN.
• Trade: The trade relationship between the US and Mexico can also affect the exchange rate. When the US exports more goods to Mexico than Mexico exports to the US, the USD can strengthen relative to the MXN.

Impact of the Exchange Rate on Businesses

The exchange rate between the USD and the MXN can have a significant impact on businesses that operate in both countries. When the USD is strong relative to the MXN, US businesses can export more goods to Mexico, while Mexican businesses can import fewer goods from the US. This can lead to increased profits for US businesses and decreased profits for Mexican businesses.

Conversely, when the USD is weak relative to the MXN, US businesses can export fewer goods to Mexico, while Mexican businesses can import more goods from the US. This can lead to decreased profits for US businesses and increased profits for Mexican businesses.

Outlook for the Future

The outlook for the USD/MXN exchange rate is uncertain. The US economy is expected to continue to grow in the coming years, which could lead to a stronger USD. However, the Mexican economy is also expected to grow, which could lead to a weaker USD.

The interest rate differential between the US and Mexico is also expected to remain narrow, which could keep the exchange rate relatively stable. However, there is always the potential for unexpected events, such as a global recession or a political crisis in either country, which could cause the exchange rate to fluctuate significantly.

FAQs

• What is the current exchange rate between the USD and the MXN?
• The current exchange rate between the USD and the MXN is 19.94 MXN per USD.
• What are the factors that affect the exchange rate between the USD and the MXN?
• The factors that affect the exchange rate between the USD and the MXN include economic growth, interest rates, inflation, political stability, and trade.
• How can businesses use the exchange rate to their advantage?
• Businesses can use the exchange rate to their advantage by exporting goods when the USD is strong and importing goods when the USD is weak.
• What is the outlook for the USD/MXN exchange rate?
• The outlook for the USD/MXN exchange rate is uncertain. The US economy is expected to continue to grow in the coming years, which could lead to a stronger USD. However, the Mexican economy is also expected to grow, which could lead to a weaker USD.