Food for thought on the strength of the peso...

Foreign investment in peso-denominated money market obligations jumped US$12.23 billion in the first nine months of this year. Those volatile capital inflows were the equivalent of ¾ of remittances in the same period, 85% of direct foreign investment, and 55% of crude oil export revenues. Portfolio investment can leave as easily as it comes into a country. If the European authorities do not succeed in containing the Europe-centered financial crisis and there were to be a resurgence of risk aversion on the scale of the six months between October 2008 and March 2009…