Posted on 05/15/2004 6:40:42 AM PDT by SwinneySwitch
Valley retailers were watching the peso’s value closely Tuesday after it traded against the dollar at the lowest point in history the day before.
"Boy, oh boy, oh boy," said Mike Furgatch, general manager of Los 4 Reyes department store in downtown Brownsville. "Anytime the peso drops we worry. A slight adjustment from time to time is expected, but anytime it drops more than a tenth of a point we worry.
"Business is not strong enough that we need this sort of aggravation," he added.
Nevertheless, Furgatch said the store had a good weekend, selling gifts and clothes for Mother’s Day. Customers complained more about the rain than the peso’s slip as they visited and shopped, he said.
The peso gained 6.5 centavos Tuesday, closing at 11.615 pesos to the dollar, up from Monday’s closing at 11.68 pesos. At one point Monday the peso was trading above 11.70 pesos to the dollar. In May 2003 the average trading price for the peso was 10.27 to the dollar, according to Banamex.
The more pesos needed to buy dollars, the more expensive it becomes for Mexico residents to shop in the United States, said William Gruben, senior vice president at the Federal Reserve Bank of Dallas.
"It makes it easier for Mexico to sell its goods and services and it discourages Mexicans from purchasing goods abroad," he said.
David Guerra, International Bank of Commerce McAllen president, said the peso’s value was not newsworthy.
He attributed the change in value to international currency traders buying up dollars in anticipation of an interest rate increase. Major devaluations have historically happened because of government corruption or mismanagement.
"It’s a real small, minor slippage, everyone has recognized it’s just a short-term reaction," Guerra said.
Indeed, retailers were keeping an eye on the peso, but not overly concerned it would hurt business much.
"Watching it (the peso) slowly slide is never fun for a retailer," said Neil Westerman, owner of The Man’s Shop, with locations in McAllen and Laredo.
"Confidence is a huge thing in terms of retail buying. The short term is the fear, and in the long term it matters where (the peso) settles out."
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Jessica Rocha covers business, economics and social issues for Valley Freedom Newspapers. She is based at The Monitor and can be reached at (956) 683-4448.
only if the peso drop becomes a crisis like in 1995. a weak peso should mean less undocumented workers and more jobs moving to mexico
Peso falls = bad
Peso rises = bad
Don't worry, Jorge will bail them out when the times come.
As they used to say on the highway construction projects, "Your tax dollars at work."
Mexico is like a big anal cyst. Our taxpayers will bail them out again.
Wow, 11,615 pesos to the dollar, and I thought 3800 to the dollar was pretty bad back in 1992. Of course, I'm using the old numbers--before one thousand pesos became one peso.
ping
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