Why did Mexico's peso fall today?

It's not often that currency moves have an obvious explanation. But every so often, you can apply the laws of supply and demand to FX. For instance, when Citigroup announced that it was buying Mexico's Banamex for $12 billion, the Mexican peso rose because of all the money expected to flow into the country. Today, the flows are the other way around: Mexico's Cemex is buying Rinker, which is mainly based in the US, for $15 billion. So one would expect the peso to fall.

Or, you know, you could just blame the housing market:

April 10 (Bloomberg) -- Mexico's peso fell the most since March 13 on concerns a housing-led slump in the U.S. will curtail dollar flows.
Subprime mortgage defaults may temper U.S. economic expansion, a Bloomberg survey of economists today showed. The U.S. buys about 80 percent of Mexican exports.

Now, I'm not saying that the peso fell because Cemex is buying Rinker. I think all such attempts at causal reasoning are silly, and in any case we know very little about how much of the acquisition price is going to come out of Mexico. But I am saying that if you're going to insist on some kind of reason for the fall in the peso, the Rinker announcement has to be much more compelling than a bunch of old news about the US housing market.

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