Mexican Peso Hits Record Low Against United States Dollar

I f you are looking for a country to travel in which your dollar gets you more for your money, look no further than Mexico, as the United States dollar can buy more Mexican pesos now than ever — at least for many years — and the peso could sink even lower this year.

Mexican Peso Hits Record Low Against United States Dollar

Mexican pesos to one United States dollar

The chart which shows how many Mexican pesos have been needed to be exchanged for one United States dollar over the past ten years. Click on the chart to access the original source — as well as to get the latest exchange rate. Source: XE.

At the end of the day yesterday, Wednesday, January 4, 2017, the United States dollar would have netted you 21.4796 Mexican pesos after coming off a record high of 21.614 Mexican pesos.

In other words, one Mexican peso costs only 4.655 cents in United States currency.

In comparison, you could purchase only 9.93330 Mexican pesos with that same dollar back on Saturday, August 2, 2008.

Two Reasons as to Why the Mexican Peso Has Been Devalued

One reason for the significant decline of the Mexican peso is attributed to the possible negative impact which the policies of Donald Trump might have on the economy in Mexico once he is sworn in as president of the United States on Friday, January 20, 2017 — especially with his intentions on keeping jobs in the United States instead of exporting them to Mexico; threatening to increase cross-border taxes on companies based in the United States which intend to manufacture products in Mexico; and that ever-looming infamous vaporware wall proposed to be constructed along the length of the entire border…

…but the main reason why Ford Motor Company has abandoned its plans to build a plant in Mexico has little to do with Donald Trump and more to do with the initiative of building electric cars and self-driving cars, which require highly-skilled workers and not typical assembly line employees. “The Ford engineers, tasked with creating these models, work in Dearborn, Mich. — 20 miles from the Flat Rock assembly plant. Moving production to Mexico would have made their jobs harder,” according to this article written by Danielle Paquette for The Washington Post.

Summary

This news is not necessarily good for the economy of the United States. The reason is because when the United States dollar is stronger, goods and services from the United States become more expensive to Mexicans, who may either save their money or look elsewhere to purchase similar goods and services…

…but for you as a traveler, this is potentially good news because goods and services will theoretically be generally less expensive for you in Mexico due to you having more purchasing power — especially if you are from the United States.

For the reason of the favorable currency exchange rate, 2017 may be the best time to visit Mexico.

Composite photograph ©2017 by Brian Cohen.

5 thoughts on “Mexican Peso Hits Record Low Against United States Dollar”

  1. Carl S says:

    When traveling to Mexico as long as you spend Pesos at truly non-tourist oriented Mexican-owned businesses you’ll find superb bargains. However, my experiences traveling the world over 40 years is that in a Dollar Reserve Currency world even small businesses – much to the punishment of the natives – hike their prices accordingly. Forget getting bargains at the international hotel, rental car, airlines as they simply keep the dollar rate. The Peso could go to 60,000 to a U.S dollar. and Hilton would still charge $150.00 a night in Mexico. Restaurants, local smaller independent hotels, transportation (bus, subway), gas stations, and grocery, Mexican retail shops (forget the upscale shopping malls, they too quickly/daily adjust the Peso price) are where you’re bound to save big. The problem for Mexico and a weak currency is the temptation for the government to hike price controlled items, such as the tortilla. The last time they tried that there were riots, and they backed off. Already there are reports today of violence regarding rising gas prices at Pemex gas stations. So when the price for staple items get out of reach for the average Mexican trouble can brew very quickly. So keep an eye on events in that regard as you plan your travel to Mexico. Think Venezuela.

    1. Brian Cohen says:

      Your excellent synopsis is exactly why I wrote in the article that “this is potentially good news because goods and services will theoretically be generally less expensive”, Carl S; but I steered clear of stating what you said — if only because there are always exceptions to every rule.

      Actually, my first thought was Ciudad Juárez and not Venezuela — but you are correct. Reasonable caution should be exercised — especially in unstable economic times…

      1. John A Chambers says:

        LOCALLY PRODUCED goods and services may be cheaper… for a time. Anything that relies on US materials and/or technology will necessarily see a rise in cost.

        As my Mexican colleagues point out, there may be increased opportunity for European and Asian manufacturers to establish facilities in México and aimed at the Latin American market. Such plans which were previously cost INeffective may now be very attractive to competitors from outside North America.

  2. WR says:

    Yay! Now I can go get taken hostage or beheaded for much cheaper.

    1. brteacher says:

      WR, if you go to Acapulco or Puerto Vallarta or some of the border towns. Mexico City is awesome and has much, much lower crime rates than many US cities. Don’t you dare go to Chicago.

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