Weak peso? No problem — at least for everyone else

4/3/2016 CNBC

6732357797_64d2ba3cdc_mWhen is a historically weak foreign exchange rate not a major concern for the world at large? Apparently, when that country is Mexico.

Since the start of the year, the U.S.’s neighbor to the South has seen its peso sink to historical lows — prompting the hasty intervention of Mexico’s policymakers to smooth out the volatility.

The currency’s faltering fortunes have tracked other battered emerging market (EM) currencies hit by the global commodities downturn, yet the peso has still largely fared better than other EM currencies. The MSCI Mexico Index has outperformed the broader MSCI EM Index by 12 percent in local currency terms since October 2014, according to data from investment advisory firm DDCapital. That was at a time when the peso slumped nearly 30 percent against the dollar.

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