Should I buy my Pesos now?

As one of the 53 million tourists that visit Mexico every year, I’m faced with the question, “Should I buy my Pesos now or should I wait?”

Rural Municipality of Britannia No. 502 2023 Spring Ratepayers’ Supper & Meeting

Thursday, April 27, 2023

Hillmond Memorial Hall | Supper at 6:00 p.m. General Meeting to follow at 7:00 p.m.

There is no cost to R.M. of Britannia ratepayers, however, those wishing to attend the supper must indicate their intent by calling the R.M. of Britannia office at 306-825-2610 no later than April 21 at 4:00 p.m.

As Canadian snowbirds, we spend the winter months in Mexico at a casa we own, so our seasonal expenses add up when considering house maintenance, property taxes, HOA dues, utilities, car costs, groceries and planned dental expenses.

It’s worth doing a little homework to forecast the best rate. So how often do I hit the bull’s eye? Well, it’s like winning an argument with my wife. It’s rare.

Currency forecasting is a mug’s game most of the time. There are sooo many factors that go into predicting exchange rates in the short term that make it challenging. However, trends do develop over time and that’s when I’ll step up and buy.

I’ve spent many hours researching economic figures and trends and I’ve studied (and passed the exams!) all the theories about how the currency cross rates (MXN/USD) are supposed to behave.

But all of that is theory and more pertinent for periods longer than a year.

Trying to make sense of inflation differentials, GDP forecasts, central bank policy, employment trends and interest rate movements is mind-numbing.

After decades of crunching numbers, I have found the best way to do this is to just look at the daily chart, see where the trend in the peso vs U.S. dollar is headed and buy smaller amounts if the trend is in my favor (increasing) or step up for a larger amount if the trend is moving against me (declining). Either way, I prepare myself for “buyer’s remorse”, the act of lamenting that I should have bought more or less in hindsight and beating myself up over it.

So, what am I thinking currently? Well, looking at the USD/ MXN chart the rate is about MXN19 to 1 USD which is the same as it was in 2020 just before Covid started.

Looking back further it was MXN13 in 2015; MXN19 looks pretty good. But wait. During Covid it got up to MXN25.75 – known as “the good old days.” That was a 35 per cent premium over today’s rate. My buyer’s remorse just kicked in. I should have bought more.

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Thursday, April 6, 2023