US dollar back to 18 pesos

US dollar

US dollar back to 18 pesos, which are the reasons?

US dollar Exchange rate jumped 30 cents today, which is over 18 pesos per dollar for the first time since March 23rd. These are the factors why the Mexican peso has been lately under pressure.

Oil

The oil producers are having a meeting this month in order to have an agreement to output freeze the crude oil. This would help the price; however, the markets doubt on the will to reach an agreement. Mexico, as an oil producer is getting affected by the expectations.

Fed

The most recent information is that the Fed will adjust its way on raising the interest rate according to the performance of the US economy, but taking into account the defects that the global weakness might have over the US economy.

As per as the members of the monetary policy committee, there has only been two increases vs. the four that were expected at the end of 2015. This perspective change helped to slow down the US dollar.

Markets are nervous because some of the Fed members are making comments about the possibility on increasing the interest rates before it was expected. The effect is a dollar recovering.

Global Weakness

The last economy data from China has given back a smile to the market as it looks that the manufacturing industry fall has stopped. Also, the government has announced stimulus measure.

Mexican Perspective

SAT has announced to the Congress the perspective for next year, and they anticipated that the situation is not getting better. A growth of 2.6 & 3.6% is expected, a lower oil price and less production in 36 years. Some analysts are saying that maybe the expectations are even too high.

Salomon Juan Marcos Villarreal, as a president of Grupo Denim, a manufacturing company that exports denim jeans to US customers, explained how the US dollar is affecting his company. “We are an export company, and we do get pay in US dollars, but, we are in Mexico and all labor and administrative costs are in pesos; therefore, we do get affected” , said Salomon Juan Marcos Villarreal.

 

E-Commerce killing big retail stores

ecommerce killing big retail stores

E-Commerce killing big retail stores, should we all get on line?

Internet crushed our life upside down. Nowadays we can have friends from the entire world; we can have web conferences, get any kind of information in an instant and buy all kind of products.

The first online stores sold books back in 1992, and now you can buy everything on internet: clothing, tickets, electronics, etc…The only troubles that this system is facing is that the customer does not see the goods and the wait time because when we go into a retail store we see something that we like, we take it and we buy it; however, there are a lot of benefits on the on line shopping and this is why it is getting most popular every day, especially because of the costs, on line stores are much cheaper than a retail store. No rent and bills get paid, only web hosting and technical support.

Right now, all the brands are building their stores online because life is getting by so fast that people do not have enough time to go and buy from retail stores anymore, they want everything to be fast and easy, housewives order their market on line and they can have it on their door by the next day, we can buy our favorite jeans or presents at the same time without running thru all the store.

Jeanswear brands are putting all their collections on line and they are increasing their sales, production orders are increased to contractors and manufacturers in this sector.

Grupo Denim, a manufacturing leader company in Mexico, reports a sales increase after putting a website with all the company information and provided services. For Salomon Juan Marcos Villarreal, its president, even if the ecommerce represent the closing of so many retail stores in the beginning future and even if Grupo Denim does not sale jeans on line, their services are offered on its website and this has been a great jump for the company business. “As Bill Gates said: If your business is not on the internet, then your business will be out of business”, said Salomon Juan Marcos Villarreal.