Investing in Forex trading is one of the most suitable ways to diversify your asset portfolio, especially when you own some of the strongest currencies such as yen, dollar, Euros, and Pounds. Despite these currencies dominating the top trading charts, investment preferences, and investment values, the peso is currently emerging as one of the most suitable trade currencies.
The Mexican currency is fast gaining value against the dollar and other currencies, and for the first time, it is no longer a risky currency but one of the most stable.
Therefore, to boost your forex trade investment strategy and portfolio, consider holding some pesos due to its stability, prospects, and performance metric in the last seven years. These metrics include its suitability for trade and stability as driven by relative disruptions in major economies; meanwhile, the Mexican economy continues to thrive.
To understand why you should invest in the peso, let’s do a chart analysis and understand the factors shaping its performance to try and predict the future.
1. The Performance of Pesos Against Dollar
Based on the forecast charts and the already observed performance metrics, it is notable that the dollar is weakening against the peso, which constantly gains some value. This is a positive sign to investors and forex traders looking for additional currency to diversify their foreign exchange portfolio by holding different currencies.
For a long time, the dollar had major strengths against the peso; however, from 2015 to 2023, the peso is at an all-time high compared to the dollar, and the value is fast increasing as driven by major economic factors in Mexico. The rising value has led to the term super peso to refer to the strong currency that is fast gaining value over other major currencies.
The rise in the value should be a pointer to forex traders trading on major platforms such as RoboForex to consider it one of the best forex investments, as revealed in the revealed in the dollar-to-peso chart. Therefore, as an investor, avoid the negative perceptions of the Mexican currency and start focusing on it as one of the most ideal and stable forex investments.
Based on the chart pointers, the growth is not likely to slow down any time soon, and even if the dollar gains some strength, the peso is still expected to grow at the same trajectory, making it one of the most reliable trading currencies. Traders in Latin America can now have an option of a stronger currency to consider for major trade transactions instead of giving more attention to the dollar.
2. A 52-Week Analyses and Future Forecast
In the last 52 weeks, the value of Pesos vs. the dollar has remained relatively stable and high, trading between 16.68 and 20.5513 against the dollar. The mean average trade value has been 17.20 to a dollar, making it relatively stronger. It will likely remain between these brackets as projected by economic comebacks in major economies, especially the US economy, which is getting back on track.
The relative value of the peso against the dollar remains stable and expected growth; however, it gains more value depending on global factors, especially geopolitics and economic issues. Notably, based on the current growth trajectories in the Mexican economy, the growth remains a positive prospect.
3. Why is the Dollar Weak Against the Peso
In 2023, the dollar has been relatively weak against some top currencies; however, the peso has gained value due to these weaknesses. One of the reasons explaining the slowing dollar value against the peso is the economic issues in the United States, like inflation, which is currently easing, making the dollar relatively stable and giving other currencies a chance to gain some value.
Investors seeking relatively safer currencies for their investments can now consider other options and currencies besides the dollar.
Despite the ongoing war in Ukraine, most currencies and economies are recovering from the shock as other supply chains are established; therefore, the pressure on the dollar is easing as most economies recover. The effects of this war are declining; hence, the interest and inflation rates are declining, boosting the peso’s value and putting it at the same performance levels as major currencies.
Whenever there are geopolitical and economic tensions, investors will likely prefer stronger and relatively stable currencies to avoid losing their investments, hence the higher dollar value in the past. As the tension eases, the dollar value is likely to decline, giving a chance for the peso to rise.
4. Why is the Peso Rising Against the Dollar
One of the concepts that explained the dollar’s strength against the peso was the issue of dollarization, which refers to the dominance of the dollar in major trades, especially on its neighbors. Still, the dollar remains one of the trade currencies in Mexico, competing with the pesos; however, that influence has been declining gradually as the pesos gain favor as major and local transactions are completed in pesos.
The growth in the Mexican economy over the years can also explain its growth against the dollar since Mexico is a major producer of foods and goods needed globally. It is one of the leading corn, soy, wines and spirits, fruits, and horticulture producers, and its main trading partner is the US.
This influence is expanding as other economies seek Mexican goods, thereby boosting its influence and trade value on the global forex market, leading to peso strength.
Conclusion
Major economies such as Europe, China, Japan, and the US face specific challenges while Mexico grows, giving its currency an advantage over the dollar. Based on the historical chart analysis, the peso will likely gain more value against the dollar and other global currencies. This growth trajectory will likely rise, making the peso one of the most reliable and suitable currencies for forex traders.
