REAL ESTATE INVESTMENT: AN INVESTMENT OPPORTUNITY DURING THE DOLLAR’S DECLINE
Superpeso’ breaks new floor in 2023: trades below 18 units vs. the dollar
The Mexican peso, known as the ‘superpeso’, broke a new floor in March 2023 by trading at 17.97 units per dollar, according to data from the Bank of Mexico. This 0.86 percent appreciation was due to greater risk appetite, the interest rate differential between the United States and Mexico, and the generalized weakness of the dollar. The Mexican peso was the eighth best performing currency against the dollar in that session, making it the most appreciated emerging market currency in 2023.
In this context, this comparative analysis seeks to answer the question: What is the price of the ‘Superpeso’ that breaks new ground in 2023? The answer to this question depends on factors such as the relative strength of the Mexican currency, the weakness of the dollar, rising interest rates, and increased risk appetite. These factors have contributed to the Mexican peso’s 0.86 percent appreciation, reaching a rate of 17.97 units per dollar.
In addition, the Mexican peso accumulated an advance of 2.33 percent in the weekly closing, and a gain of 7.88 percent so far this year. This places it as the best performing emerging market currency in 2023. In conclusion, the price of the ‘Superpeso’ in 2023 was 17.97 units per dollar, a value that reflects the relative strength of the Mexican currency, and an appreciation of 0.86 percent thanks to the aforementioned factors.
The peso rebounded 26% from its worst price in 2020 and this year is already the world’s most appreciated currency. High net worth consumers gain and exporters and remittance recipients lose.
What is the peso’s rate of return for each year from its worst price in 2020 to its best price in 2018?
Our investment experts can help you determine the peso’s rate of return for each year from 2020 to 2018, based on relevant statistical data. If you would like personalized wealth advice, let’s schedule an appointment to work together and build a strategy tailored to your needs.
Improving dollar appreciation will have a major impact on the peso, as a stronger dollar means a weaker peso, which will affect the cost of imported goods. This in turn will affect the cost of living for consumers, as prices could increase. In addition, the improved appreciation of the dollar could reduce investment in the country, as investors would face higher costs to do business in Mexico.
Currently, the Mexican peso is one of the most appreciated global currencies.
Thanks to its stability, strength against the U.S. dollar and high liquidity. This is due to a number of factors, such as stable interest rates, responsible monetary policy and a strong Mexican economy. These characteristics have helped ensure that the Mexican peso remains strong compared to other world currencies. In addition, the Mexican peso also has a number of trade agreements with different countries and the European Union, which helps to increase the value of the currency. This has contributed significantly to making the Mexican peso a highly appreciated currency worldwide.
The Mexican peso is the official currency of Mexico and has been trading with a lot of volatility over the last few years. In 2020, the Mexican peso has devalued 14.5% against the U.S. dollar, year-to-date, while the Mexican currency has lost value compared to other currencies such as the euro, yen and pound sterling. The volatility of the Mexican peso has been affected by factors such as geopolitical uncertainty and the global change in oil prices. This has translated into significant changes in exchange rates between the Mexican peso and the U.S. dollar. In fact, over the last two years, the Mexican peso’s parity against the U.S. dollar fluctuated between 18.00 and 21.00, and economists expect the Mexican currency to continue to depreciate in the short term as investors continue to anticipate that Mexico’s Country Risk will increase.
The Mexican peso has experienced a significant increase from its low in 2020, which is mainly due to increased foreign direct investment (FDI), the recovery of oil prices, higher demand for Mexican products and higher liquidity compared to last year. In addition, the Bank of Mexico has maintained an accommodative monetary policy, increasing the supply of pesos to increase public spending and private investment. On the other hand, the FED has maintained low interest rates to support the U.S. economic recovery, which has contributed to increased foreign capital in Mexico. Finally, the implementation of a more expansionary fiscal policy has provided additional support to the Mexican economy. This has helped drive economic recovery and growth, which has contributed to the increase in the value of the Mexican peso this year.
Statistics for the end of 2022
According to data from the Bank of Mexico, the Mexican peso appreciated 0.86% in the last session of the week.
The appreciation of the Mexican currency has a positive impact on investment opportunities. This is because a strong currency generates higher returns for investors, as it is more likely to appreciate in the market, which means that the local currency can buy more goods and services. In addition, a strong currency also offers greater foreign investment opportunities, as foreign investors can earn higher returns if they invest in a stronger currency.
The current economic outlook for the Mexican dollar is positive, as the last close was 18.115, buying 18.1571 and selling 18.1823, with a daily range of 18.0757 to 18.2836. This is mainly due to last year’s increase in exports, as well as remittances and foreign flows from tourism, in addition to the interest rate differential compared to other nations. In addition, the Mexican dollar has moved -9.45% in the last year, with an opening of 18.105 and 52 weeks ranging from 17.8975 to 21.0566.
USD/MXN – U.S. Dollar Mexican Peso Analysis
To be successful in a dollar investment and wealth during the dollar’s decline, it is important to take into account the following factors:
- Establish a realistic objective for the investment.
- Study the current economic situation of the country, in order to know the impact it may have on the value of the dollar.
- Conduct a thorough analysis of the financial market to determine the best time to invest.
- Use an appropriate investment technique to reduce the risk of loss.
- Diversify assets to reduce risk.
- Analyze Mexican dollar price information and historical data to identify long-term patterns.
- Keep abreast of news and information related to the value of the dollar.
- Keeping up to date with changes in the exchange rates of the Mexican dollar against other major currencies.
- Establish stop-loss limits to avoid large losses in case the investment does not perform as expected.
- Establish profit limits to ensure that the highest possible returns are obtained from the investment.
What is the dollar exchange rate in Mexico today, Tuesday, April 11, 2023?
Currently, the dollar exchange rate in Mexico is $18.1765 for buying and 18.1823 for selling. Today’s daily exchange rate range is 18.0757 to 18.2836. In the last 52 weeks, the exchange rate has varied between 17.8975 and 21.0566, with an annual variation of 9.45%.
What are the real estate investment opportunities available to Mexicans?
Mexicans can take advantage of a wide variety of real estate investment opportunities. From short-term investments such as renting homes to long-term investments such as buying 3-4 bedroom properties, investors have the possibility to diversify their investment portfolio. The Mexican Ministry of Economy mentions that making decisions has consequences, so it is important to know the markets and the factors that affect the investment before making a decision.
Mexicans have the opportunity to invest in real estate through several avenues. On the one hand, they can obtain bank loans to purchase properties, but if the value of the dollar in Mexico increases, the cost of such loans will also increase, which could complicate the process. On the other hand, there are also investment products such as debt, equity and balanced investment funds, which offer the opportunity to diversify risks and take advantage of market opportunities.
How is the Mexican peso performing against the U.S. dollar?
The Mexican peso is performing favorably against the US dollar, reaching a new five-year high and approaching the psychological level of $18 per greenback. The Mexican dollar weakened at the beginning of March and the Mexican currency appreciated 0.94% to trade at $18.1337 per unit. In addition, the dollar’s weighting was at 104.430 points. This is mainly due to the delivery of strong economic data in China, as well as the delivery of good but lower than expected data in the U.S. This situation has generated greater attractiveness for investors in Mexican peso-denominated paper, which has been reflected in the inflow of dollars from remittances, exports and new investments. So far this year, the Mexican peso is positioned as the currency with the best performance against the dollar, accumulating an appreciation of 7.49%.
The Mexican peso is performing impressively against the US dollar, reaching a new five-year high and approaching the psychological level of 18 per greenback. During the intraday session, the Mexican peso registered a high of 18.0706 per dollar and a low of $18.3316 per unit, according to Bloomberg data. This appreciation is due to the generalized weakness of the dollar, thanks to a strong economic data delivery in China, as well as middling data in the United States that fails to boost a strong economy. In addition, the dollar weighting was down 0.38% to 104.430 points during the March 1 session. The Mexican peso is positioned as the eighth best performing currency against the dollar out of a basket of 23 emerging currencies, accumulating an appreciation of 7.49% from January to date.
What are the factors affecting the price of the dollar in Mexico?
The main factors affecting the price of the dollar in Mexico are:
- Exchange factors: These involve the exchange rate, the foreign exchange market, inflation and the country’s economic cycles.
- Political factors: These include monetary policy, measures adopted by the government to foster economic growth, and government stability.
- External factors: This refers to the demand for Mexican products abroad, the impact of trade agreements and the prices of international products.
- Technical factors: These include the use of buy and sell orders, trading volume and price indicators.
- Internal factors: This refers to the level of inflation, the behavior of the Mexican currency in relation to other currencies and the effects of tourism.
What are the main characteristics of the Mexican peso?
- The Mexican peso has appreciated in recent months and has benefited from the general weakness of the dollar.
- It is setting a new five-year high, approaching the psychological level of $18 per greenback.
- It is the eighth best performing currency against the dollar in the March 1 session, out of a basket of 23 emerging currencies.
- The Mexican peso is the best performing emerging market currency in February.
- The local currency has recorded a high of 18.0706 per dollar, levels seen in April 2018, and a low of $18.3316 per unit.
- It is being supported by the expectation of interest rate hike by the Bank of Mexico.
- It is being boosted by dollar inflows from remittances, exports and new investments such as Tesla’s arrival in Mexico.
- The currency has positioned itself as the best emerging currency by accumulating an appreciation of 7.49% out of a basket of 23 emerging currencies.
- So far this year, the Mexican peso is positioned as the currency with the best performance against the dollar, accumulating an appreciation of 7.49%.
To obtain better investment returns in Mexico, it is recommended to follow the following steps:
- Conduct market research to learn about global trends and investment instruments abroad. This will help you evaluate the increase or decrease in the value of the dollar.
- Consider diversifying your investment to spread your risk and take advantage of market opportunities.
- Explore foreign exchange services, such as international transfers and third-party payments, that offer personalized attention from an expert foreign exchange specialist.
- Be aware of the opportunity costs of your investment decisions, because if you choose to execute an action, you will be forgoing the benefits of another alternative.
- Invest in financial instruments such as corporate bonds, stock market indexes and differentiated funds such as Actinver’s Maximo. These will allow you to take advantage of the rising dollar without exposing yourself to the risk of a fall.
- Take advantage of the income you get from the dollar to pay for the products and services you need.
- Explore tourist destinations to take advantage of the price of the dollar, always bearing in mind that if you purchased packages in advance, there is no adjustment with the depreciation.
To make an investment in Mexico, several factors must be taken into account, such as internal and external political and economic stability, periods of inflation or global crises, foreign exchange services, investment products, global trends and investment instruments abroad, the increase in the value of the dollar, purchasing power, bank loans, the decisions of individuals, macroeconomic stability, risks of economic crisis, public balance, spending discipline and the value of the dollar against the peso.
How is the Mexican economy affected by the price of the dollar?
When the price of the dollar rises, the Mexican economy is affected due to the opportunity costs involved. The prices of imported products increase, which causes an increase in inflation levels and a decrease in the purchasing power of families. Tourism also benefits, as it is cheaper for Americans to vacation in Mexico. Finally, Mexicans who receive dollars from the United States also benefit.
The Mexican peso exchange rate has appreciated significantly in recent months, from $24.85 pesos per dollar in April 2020 to $18.40 pesos per dollar today. This means that each dollar is equivalent to $18.44 Mexican pesos at this time. This appreciation is explained by several factors, such as rising interest rates in Mexico, an increase in demand for exports and remittances and foreign tourism flows, as well as a global trend of U.S. industry to relocate factories to Mexico. This appreciation has benefits, such as a lower level of inflation, but it also generates some disadvantages, such as a decrease in the purchasing power of shipments by Mexican workers abroad, and a lower competitiveness of national products abroad.
United States and Mexico
The current exchange rate between the U.S. dollar (USD) and the Mexican peso (MXN) is MXN 18.44 per USD. This ratio changes constantly depending on the international economy, trade agreements, the political situation and the financial markets. For example, since May of this year the exchange rate has increased significantly, due to trade tensions between the United States and China, as well as increased tariffs. This has benefited Mexicans receiving remittances from abroad, as well as tourists. On the other hand, travel to the United States requires spending a greater amount of money on tickets, lodging and expenses during their stay. In conclusion, the exchange rate between the U.S. dollar and the Mexican peso affects both countries and citizens traveling between them.
The depreciation of the Mexican peso is calculated as follows:
- Determine the current exchange rate of the Mexican peso to the U.S. dollar. This can be done by consulting an official source such as the Bank of Mexico.
- Determine the exchange rate of the Mexican peso at the time of comparison. This means choosing a reference point, such as the month and year in which you want to see the depreciation relative to the U.S. dollar.
- Calculate the depreciation. This is done by subtracting the current exchange rate of the Mexican peso to the U.S. dollar from the exchange rate of the Mexican peso at the time of comparison. The difference between the two is the depreciation of the Mexican peso.
A change in currency can ensure sustainable economic development by encouraging foreign direct investment and the creation of new jobs, as well as technological innovation and greater integration with international trade. In addition, a stronger currency also boosts financial markets, which increases the confidence of international investors to invest in the country. This, in turn, can generate a more competitive economic environment and greater certainty for investment.
Dollar exchange rate
The dollar exchange rate depends mainly on supply and demand, i.e., how many dollars are available in the market and how many people want to buy dollars. The supply and demand for dollars is determined by several factors, such as Mexico’s interest rate compared to the U.S. interest rate, the level of exports and foreign investments in the country, the movement of remittances, the country’s international reserves, etc. If there is more supply of dollars than demand, the price of the dollar will go down; otherwise, the price of the dollar will go up.
In addition to the supply and demand of dollars, there are other factors that can influence the exchange rate. For example, the performance of the U.S. economy compared to the Mexican economy, the level of inflation in the two countries, and the perceived risk of investing in the two countries. These factors can contribute to a higher or lower demand for dollars, which can drive the price up or down.
How to take advantage of the dollar exchange rate opportunity in Mexico
Understanding the dollar’s influence on the Mexican currency
How does the dollar exchange rate affect the Mexican currency? The U.S. dollar is one of the main regulators in the international market, therefore, knowing how the dollar affects the Mexican peso is fundamental to plan projects, trips and activities. The dollar is a safe haven currency that remains strong in economic or geopolitical situations, such as, for example, the conflict between Russia and Ukraine. Therefore, having a reserve of dollars helps to reduce the impact of a fall of the peso against the dollar. The International Monetary Fund has suggested implementing fiscal reform, reorienting public spending, encouraging private investment and continuing an accommodative monetary policy. This will help prevent the dollar from affecting the Mexican currency and generate greater economic growth.
The exchange rate of the dollar in relation to the Mexican peso is a close relationship that affects Mexico’s economy, especially due to the fact that a large part of Mexico’s imports come from the United States and the U.S. currency is one of the main regulators in the international market. This directly affects individuals and companies that manage the purchase and sale of foreign currencies, as changes in the exchange rate can have a significant impact on their transactions.
Research the best investment options in Mexican pesos.
There are ways to invest in Mexican pesos, such as real estate markets, stock markets, investment funds that are reinvested every day looking for the best market options to maintain their competitiveness and profitability, and banking services for your patrimony.
Investing in real estate is a good option, as long as you have the right strategy to guarantee the success of a project and you have previously measured the scenarios of the sector in the year in which it is going to be carried out. Based on this fact, the question of many people who want to bet on this industry is whether 2023 is a good year to invest in real estate; the answer is: yes. But regardless of whether there is a trend towards the recovery of the sector, investing in real estate is a good option due to the characteristics of the business itself. According to Banco Sabadell, there are at least three reasons that mean a plus to bet on this model: it generates long-term returns, you can find properties at auction prices and they are lower risk investments. (Source: Sadabell, December 8, 2021)
Tips for investing in real estate with dollars in Mexico
Research investment opportunities
To research dollar real estate investment opportunities in Mexico, the following steps are recommended:
- Research Mexico’s general economic context. This includes factors such as political stability, internal and external economic stability, periods of inflation or global crises, among others.
- Diversify your investments to spread the risk. This means that investors should consider different sectors of the economy to maximize their profits.
- Seek out an investment professional for specific advice. This will help you develop an efficient investment strategy that aligns with your investment objectives.
- Look for resalesThere are units purchased by foreigners who bought their units in dollars. When making a resale they the same amount acquired, however for Mexicans it opens a great opportunity to acquire a unit at a lower cost, due to the uncertainty of the global outlook some owners have opted to resell their units at lower prices, since having acquired their units in dollars and reselling in dollars their investment is not affected in any way, while for the Mexican the current exchange rate represents the Opportunity to buy at a lower cost.
A clear example is the sale of an apartment in ZAMBO.
ZAMBO: PRICE IN 2022 $460,000.00 Dollars (with a T.C $20 MXN) $9,200,000.00
ZAMBO: PRICE IN 2023 $435,000.00 Dollars (with a T.C $18 MXN) $7,830,000.00
So the difference of $1,370,000.00 MXN just because of the current state of the world dollar exchange rate.
As this is a great investment opportunity it will be important that you take into account the exchange rate of the dollar, to be able to negotiate it within your offer of purchase and sale. This will prevent the price in pesos from being affected when there is an increase in the dollar, normally a developer will accept $2 pesos above the exchange rate but there are times when with an aggressive offer, you may be able to lock in the dollar during the course of the entire pre-sale. This means that if the dollar goes up to $23 mxn you will be paying only $18 mxn which represents a GREAT opportunity to RESELL. to have a PLUSVALUE just because of the exchange rate.
Analyze market trends
Knowledge of market trends can help you make wise decisions when investing in real estate with dollars in Mexico. This is because having knowledge about the internal and external economic and political situation, as well as periods of inflation and global crises, will allow you to have a better vision of the markets and how currencies are behaving. Knowledge of market trends will also help you diversify risk and take advantage of opportunities in different markets. This will allow you to make intelligent decisions and take full advantage of services for currency exchange, international transfers, third-party payments, as well as automated settlement. In this way, you will be able to obtain the benefits of having an Actinver account in dollars to invest in real estate with security and profitability.
Knowledge of market trends helps to invest in real estate with dollars in Mexico by allowing investors to make decisions based on the most up-to-date and accurate information. This helps them understand the local and global macroeconomic situation, price changes, capital flows in each market, international investor demands and emerging trends. This information can also be useful in tracking the performance of your real estate portfolio with dollars and making buying and selling decisions. Knowledge of market trends can also help investors find the best way to diversify their investments to reduce risk. Finally, this information can also help investors choose the best products to invest in dollar real estate in Mexico to ensure they are maximizing their returns.
In the current market, units with 3 or more bedrooms are the ones that exist in smaller quantities, but are being the most sought after by large groups.
Consider diversifying your assets
Asset diversification can help you invest in dollar real estate in Mexico by minimizing risk during the investment process. This allows them to protect their capital from exchange rate fluctuations and have better control over investment returns and profitability. On the other hand, diversification can also help in establishing a competitive selling price for the property, as the different investment instruments maintain the liquidity and profitability of the property.
Asset diversification can help in investing in dollar real estate in Mexico by allowing investors to spread their risk across different asset classes and markets. This means that investors can purchase dollar properties while also investing in other financial products, such as bonds and stocks, ensuring a stable income stream and reducing the risk of investing in a single market. This also allows them to take advantage of market opportunities, such as buying properties at low prices during periods of inflation or economic downturns. Asset diversification also allows investors to obtain a consistent return through disciplined risk management and informed analysis, as well as the support of specialized financial advisors.
Research asset liquidity
Searching for dollar real estate investment funds in Mexico can be a useful way to research asset liquidity. This is because real estate in Mexico is backed by the U.S. dollar, which makes it a more liquid and stable asset in terms of price. This allows investors to reduce their portfolio risk by having a stable investment backed by the foreign currency. Analyzing international markets and their relationship with the Mexican peso can also help in making investment decisions. By monitoring factors such as political stability, inflation and the global financial crisis, investors can make informed decisions about when is the right time to invest in dollar real estate investment funds in Mexico.
Searching for dollar real estate investment funds in Mexico is an effective way to research asset liquidity, as by investing in dollars you can take advantage of the opportunity to diversify risk, assess economic political stability, take advantage of periods of inflation and global crises for better returns. In addition, the Foreign Exchange services include personalized attention, market analysis, payments to suppliers, international transfers, purchase and sale of transfers in dollars to accounts domiciled in Mexico, and the possibility of having an Actinver account in dollars for legal entities. Therefore, it is possible to estimate liquidity and obtain better yields in long-term investments in dollars.
Make sure that the company has the resources and capacity to carry out the project.
To invest in real estate with dollars in Mexico, a company needs the resources and the ability to conduct a thorough financial analysis to evaluate the market, prices and returns on its investments. It must also have sufficient liquidity and a diversification strategy to spread risk. In addition, you need to be familiar with the appropriate banking services for the asset, and have access to market analysis and Foreign Exchange Desk commentary. Finally, you must have an Actinver account in dollars for legal entities, taking advantage of the benefits of personalized attention by an expert specialist in foreign exchange, payments to third parties and international transfers.
To invest in real estate with dollars in Mexico, a company must have the necessary financial resources to cover the costs of the transaction and a broad capacity for market analysis. In addition, it is important to take into account aspects such as diversification to distribute risk and evaluate existing opportunities in the market. Access to local information on each market, active management with a focus on the long term, and informed research and disciplined risk management are indispensable for a good investment.