Content area
Full Text
How other currencies fare against the dollar affects the peso's performance
THE PLUNGE OF ASIAN CURRENCIES against the dollar brings to mind a common and often overlooked monetary phenomenon that can affect everything from Mexico's foreign trade to the investor's selection of what stocks to buy. That is double revaluation of the peso on the upside or double devaluation on the downside, as the case may be.
You have to remember that the peso does not stand alone on the international stage. Its fate is linked to other currencies via the dollar, so whatever happens to the Mexican currency affects its parity with the rest of the world and whatever happens to the dollar also affects that parity. In other words, if the peso devalues or revalues against the dollar, in relation to other currencies it tacks on how they have been behaving against the dollar.
Right now, the peso seems to be moving countercurrent to what is taking place between the greenback and most of the world's major (and many not so major) currencies. While the Mexican currency has...