The opinion of Ernesto O’Farril helps to explain the lowering of the dollar against the peso and in general against all currencies; he comments that all the central banks of the world have implemented extreme policies and measures to expand the means of payment by a magnitude never before seen, the distortion generated by these extreme monetary policies not only affects financial markets; stocks, bonds or currencies, it also directly affects the prices of the markets of the real economy.
For this reason, we must point out that excess global liquidity immediately translates into a greater flow of financial investments to emerging markets. When this happens, the emerging currency that benefits the most is the Mexican peso, as it is the most liquid emerging currency in the world. It is evident that markets move in waves in which optimism or pessimism accentuate around an equilibrium price, or intrinsic value.
Even when markets are seriously distorted by excessive money creation, sooner or later rationality prevails. Overvaluation or undervaluation of markets is never eternal. So the volatility that we can experience in the following months in all the markets is going to be a reserved forecast.