Comments on: Where Is The Argentine Peso Headed? http://www.argentinepost.com/2008/11/where-is-the-argentine-peso-headed.html Information & Insight on Argentina Sat, 04 Feb 2012 22:30:13 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Thomas Locke Hobbs http://www.argentinepost.com/2008/11/where-is-the-argentine-peso-headed.html#comment-1038 Thomas Locke Hobbs Fri, 21 Nov 2008 11:56:05 +0000 http://www.argentinepost.com/?p=524#comment-1038 If the Argentine Peso had tracked the decline in the Brazilian Real since July it would currently be around 5 pesos to the dollar. It amazes me how hypersensitive people are to moves of a few penny in the value of the dollar. Brazilians are so much more sanguine about their currency. Let's not forget it was Brazil's devaluation in 1998 that started the recession here that ended with the crisis of 2001 and the end of the currency peg. Brazil is Argentina's biggest trading partner and the current value of the peso vis-a-vis the real is unsustainable. I wouldn't be surprised to see the peso overshoot on the downside, as it did in 2002. If the Argentine Peso had tracked the decline in the Brazilian Real since July it would currently be around 5 pesos to the dollar. It amazes me how hypersensitive people are to moves of a few penny in the value of the dollar. Brazilians are so much more sanguine about their currency.

Let’s not forget it was Brazil’s devaluation in 1998 that started the recession here that ended with the crisis of 2001 and the end of the currency peg. Brazil is Argentina’s biggest trading partner and the current value of the peso vis-a-vis the real is unsustainable. I wouldn’t be surprised to see the peso overshoot on the downside, as it did in 2002.

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