The central banks of emerging countries are sparing no efforts to the fall of their currencies in this period of high risk aversion, which could further increase if the plan to revive it adopted less than two hours by the U.S. Senate does not pay off quickly. Thus, the central bank of Mexico has sold in the currency markets more than 1000 billion dollars to halt the decline of the peso, which fell to a low address to the U.S. currency on 3 February. While the peso was worth about 10 pesos to the dollar in mid-2008, it now evolves around 14 pesos to the dollar.
It is not certain that this success in halting the collapse of the peso since the aversion to risk could even accelerate in the coming weeks. The traders are very disappointed with the relaunch plan presented this afternoon by the new Treasury Secretary, Tim Geithner. Indeed, although they are broadly aware of the need for a public mass, they do not believe the administration Obama could quickly reverse the current trend of the U.S. economy. If these fears are confirmed, the dollar could see a sharp rise, benefiting from its safe haven status.
Meanwhile, it was the single European currency that benefited today from a technical adjustment between the euro and the pound sterling to move a little against the dollar. Indeed, the three currencies are closely linked. While the British pound Monday appears on the rise, it dropped today facing the European single currency due to the earnings of investors. These buildings massive bet on a rebound of the British currency, based on the observation that although the UK economy is not ready to face the risk of implosion of the pound sterling is totally excluded.
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