“Stabilising the currency [the Mexican peso]over the longer term will ultimately depend on whether oil prices bottom out and sentiment towards emerging markets improves. We suspect it will. But the policy tightening today will weigh on the real economy too. We’ve marked down our GDP growth forecast for this year from 3% to 2.5%,” according to a Capital Economics note posted by Barron’s.
Although it has no energy sector exposure, EWW has been dragged lower by falling oil prices because Mexico is one of Latin America’s largest crude producers.
As an oil exporter, Mexico’s currency has been hit by the falling crude oil prices – ETF investors should keep in mind that while Mexico has a large oil industry, none of the country-specific ETFs include exposure to the sector.
iShares MSCI Mexico Capped ETF
