Noticed the Peso is strengthening, bad news for those of us paid in Dollars with expenditure in Pesos. A month ago it was something like 13.5 pesos to the $ and 22 pesos to the £, now it's 12.7 and 20.9 Time to cash in those dollars we've all been hoarding :wink:
Yep, it sucks 100%. A 1 peso drop over a month makes a significant difference in income. We keep everything in a US bank account though, and wait to cash out into pesos when the rate is best...for a couple weeks the rate hasn't been palatable though.
True, but will it (the dollar) drop further? Who knows? I'm gonna cash out the dollars we have on hand -not a great deal as I, like you, bank in my home currency. Let's hope it doesnt go back to 10:1, we've had an easy ride while others have been hurting during 'the recession'.
I don't know where you've been living, but everything I buy has gone up at least enough to cover the peso devaluation.. on average more so, and somehow I don't think that prices will drop just because the peso is stronger. Just got a bill today from cablemas saying they were increasing their rates again for the 3rd or 4th time this year. Electricity is around 20-30 percent higher, food costs are up about 20ish percent this year and I could go on and on.....
My super uneducated wild guess is only very little At least, that's what I hope for! The favorable exchange rate was actually a factor in our decision to relocate here. I had been wanting to, obviously, and life-wise things were sorted out well enough, so then if we're going to do it, might as well do it when the exchange is good! We weren't here in '08 when the rate when from 10 to 13/14 in a short period of time, but if it went back down to 10 now it would hurt. I cringe thinking about the difference in our rent at 13 and 10. And since we're locked into a contract, it's not like the price/value might naturally adjust.
I am no expert but I have lots of experience in buying pesos/selling dollars. I am holding the course as I think it will move back up in terms of helping people with dollars. Yesterdays Banamex closing rate was $12.43 to sell USD/buy MXN and $12.83 for the reverse. There is a typical spread in these rates of about 3.2%. Coby, I was playing the game nearly every day whent the runup started back in Aug, 2008. There was a +25% increase between July and Octobe, and a 50% jump from July to February. The peak was in Feb, 2009 when the rate actually exceeded $15.00. I cashed at exactly $15.00, the highest I ever got. I had a balloon payment that was due in late 2008 but it was tied to a performance of some legal stuff by the person I was paying. The deal was made when the rate was $10.70 and I paid when it was $12.92. That was nice. The first time I came to Cancun was July, 1991, and the rate was a bit over $3,000 to $1. I was actually carrying around $100,000 peso notes but three of them were worth only about $100 US. There were actually $1 peso coins available. 100 of them were collectively worth $.03 US. Hard to believe. In Feb, 1993 the peso was revalued and put on par with the dollar. They came out with NP, Peso Nuevo, coins. These were the original two color coins. I was traveling to Cancun a couple of times a year back then and it was very tricky for tourists, as both currencies were floating around. I am foggy on how this worked because the historical data shows the rate in the $3 to $1 range back then. I can, but hesitate to, compute the rate of inflation in the last 16+ years.
It does depend on the individual, I think I had a similar conversation a while back with someone else. If utilities and food are your only expenses then good for you! For us our biggest expenditure are rent and school fees, what we spend on food and utilities is a minor expense by comparison. In the last 18 months our rent went up by 4% schools went up by about 5%. Both of these would have almost certainly gone up a similar amount anyway regardless of the dollar value. During the same time the number of pesos we got for each dollar went up by 35%. The 30% we saved was tucked away in an account paying 4% interest pa, which effectively wipes out the increases in our main items of expenditure and leaves us 35% better off overall. More than enough to cover any increases on things we dont spend much on anyway. I dare say utilities would have gone up regardless too since they arent really directly linked to the dollar, unlike many imported foods.
I can see where having large items like school costs or fixed ( IN pesos) rent, that don't increase as wildly as everything else, can offset things for some people. As a spoiled American that eats out most of the time and buys imported things frequently, I tend to notice the increase more than some. I live on a set amount of pesos every month. Up until these last two years, I had been stashing away pesos that weren't spent at the end of the month into my rainy day fund. For almost every month since the middle of last year I've been exhausting or exceeding my withdrawals, and have pretty much eaten away my pesos reserve, without any notable lifestyle change. In fact, I'd say I'm eating out less than in previous years, and rarely frequent La Taberna, which used to see me at least once a week. Yet the pesos are still running out before the end of the month most times.
I'm going to agree with TJ and say that the Peso will soon slowly slide back down, and we'll see closer to 13+ per Dollar. I would wonder though, what would happen if the US sees a significant rise in inflation, as some predict.
