Mexico ETF Hit By Lackluster U.S. Economy

The stumbling U.S. economy is hitting Mexico’s exchange traded fund (ETF) and economy on two fronts: remittances and a lack of demand for exported goods on the part of American consumers.

Jason Beaubien for Reuters says that Mexico experienced the largest decrease in money sent home by migrants ever recorded by Mexico’s central bank. Remittances, as they’re known, are down by 16% and it’s hitting rural areas especially hard. Cash sent home amounts to billions of dollars and is Mexico’s second largest source of income after oil. [How Trade Affects Mexico.]

Paul Kiernan for The Wall Street Journal reports that, on a positive note, Mexican industrial production is up by 1%. Solid growth in the manufacturing sector has picked up where construction dropped off.

China’s move to curb lending and concerns about Greece’s sovereign debt is hitting the peso as risk aversion comes into play, Ye Xie for BusinessWeek reports. [Can Mexico Prevail?]

For more stories about Mexico, visit our Mexico category.

• iShares MSCI Mexico (NYSEArca: EWW)

• CurrencyShares Mexican Peso Trust (NYSEArca: FXM)

Read the disclaimer, as Tom Lydon is a board member of Rydex|SGI.