Barons shine at badminton tourney

The Barons badminton team kept busy on March 31 as they hosted their home tournament at Lloydminster Comprehensive High School. The team played with heart and skill and the results were as follows. Women’s Singles: Emma G, gold, Katherine T, silver, Men’s Singles: Sam Rawluk, silver, Men’s Doubles: Tristan S and Lee M, gold, Jared M and Parker S, silver, Women’s Doubles: Rhyzel G and Nikka B, gold, Mixed Doubles: Andrew C and Addy G, gold, Ryann R and Mehtaab S, bronze.

At this point, the 5-year average is about MXN20 but I’m not convinced that average will hold into the future.

The Mexican banks are forecasting a rate range for 2023 of MXN19 to 23 but new forces are at play which may render that forecast obsolete. The floor at 19 may not hold.

Strong U.S. employment data, stubborn inflation and forecasts for yet higher U.S. interest rates theoretically support the case for a stronger USD. So why is the peso continuing to strengthen against the U.S. dollar?

Ironically, those textbook axioms on how currencies should behave vis-a-vis each other aren’t holding true right now.

The peso is gaining against both the U.S. and Canadian dollars. Historically, higher interest rates in one country should lead to a higher exchange rate for that currency but a very interesting phe - nomenon is happening these days.

Covid created supply chain disruptions caused by the China covid lockdowns and incentives by the U.S. government to move production back to North America are having a major effect on the Mexican economy.

Much of the manufacturing that was done in China is moving to Mexico (called “onshoring”) and it’s in the billions of dollars for Mexico as new factories are built.

Mexico is aggressively courting large U.S. companies with competitive labor rates, labor availability, quality of goods produced, delivery lead time, and logistics costs.

The move into Mexico by big U.S. manufacturers is causing an unprecedented demand for MXN so personally I think the peso will continue to strengthen and the Mexican banks’ forecasts are wrong.

I’m a buyer of pesos at 19/USD believing it’s headed to the 17 range by year-end especially as talk of the U.S. Fed halting rate hikes later this year comes into effect.

Mexican interest rate moves tend to lag the U.S. move so Mexico is likely to have higher rates longer. That supports the peso strength argument, too.

For tourists coming to Mexico for a week or two, you will just be stepping up and buying what you need.

Some Canadians first buy U.S. dollars and then convert the U.S. dollars to pesos. That’s a mistake because you are double converting and paying 2 sets of commissions.

The best way for Canadians to get small amounts of pesos is to just use your debit card in the bank machine here.

The alternative is to go to the currency exchange (Calforex) if you live in a larger city or see what your local bank has.

The bank machine here will charge you about 5 per cent, the same as Calforex or your bank so it’s about the same. Using a credit card will cost you about the same amount but introduces fraud risk at any of the smaller merchants. I always prefer to use cash unless it’s a big ticket item like the fridge I bought at Costco last year.

I also wanted to use the credit card to get the extended warranty the card provides.

The bottom line is that instead of sitting in your kitchen trying to do endless hours of research, keep the analysis high level and stick to the charts because price action is the best culmination of all the analysis. Just go with the current trend and enjoy spending it. There is a good chance that in a year from now, I’ll look back and say once again, “Darn. I should have bought more last year.”

- Cam Renaud is a Canadian ex-pat who spends much of his time living in sunny Cabo San Lucas. Renaud is also a frequent contributor of the Gringo Gazette, the Source’s englishspeaking sister paper in Cabo.