03 Aug 2021 14:08
GBP/MXN is not popular currency pair on the Forex market, it is the cross rate against the U.S. dollar. It can be observed that the U.S. dollar has a great influence on GBP/MXN. Thus, by combining GBP/USD and USD/MXN price chart, we can get an approximate GBP/MXN price chart.
In such a way, the U.S. dollar has a great impact on both currencies. Thuswise, such U.S. economic indices as the discount rate, GDP, unemployment, new created workplaces should be carefully scrutinized to project a future movements of the pair. However, GBP and MXN can response with different speed toward the changes in the U.S. economy, therefore, GBP/MXN can be a specific indicator for the currencies.
Currently, Mexico is one of the most developed countries in Latin America. It ranks first among Latin American countries in terms of income per capita. The Mexican economy is based mostly on private sector due to mass privatization of state enterprises in the 1980s that was made to overcome the economic crisis. Most of the former state enterprises now belong to foreign companies.
Mexico is a member of NAFTA - the North American Free Trade Agreement. For this reason, the country trades actively with the United States and Canada, which brings good revenue for the Mexican government.
Mexico is the largest exporter of oil in its region. Its oil sector yields significant profits for the country. However, despite this, the main source of income for Mexico is the service sector.
Although Mexico has huge oil and gas reserves, its natural hydrocarbons are strongly depleted. The government has to reduce the amount of extracted oil and natural gas in order to avoid new problems in the economy. According to forecasts, Mexico will soon be forced to import oil from abroad to meet the needs of its economy. Such news has a significant impact on the Mexican currency which is highly dependent on world oil prices. In addition, the Mexican peso exchange rate is affected by the international ranking of the country which is based on complex economic formulas.
It should be noted that brokers set a higher spread for cross rates than for basic currency pairs. So before you start working with the crosses, get familiarized with the terms and conditions offered by the broker.