The future of the peso depends on Europe

Where the peso will close the year depends on the denoument of the "Greek tragedy", which has become a European one. If the European Community's stabilization efforts don't succeed in calming the markets, the peso will feel the fallout.

The swings in the peso are not about what's happening in Mexico. The peso's ups and downs are about volatile capital flows, returns, and investors' appetite for (or aversion to) risk. Obviously, sound macro-economic management will help us to weather the tempest that broke out in the Mediterrean; sound policies won't, however, keep us immune.