Argentine Peso into the Inferno

Argentina’s peso slid to the lowest in more than six years as dollar inflows from cereal exporters dried up amid the country’s worst drought in half a century.

The peso dropped 0.2 percent to 3.4982 per dollar at 3:22 p.m. New York time, from 3.4903 yesterday. The currency touched 3.501, its weakest since Dec. 17, 2002. Were you short?

“There is plenty of demand for dollars, but the supply is down since this year’s grain harvest isn’t as good due to the drought,” said Gustavo Quintana, a currency trader with Lopez Leon Brokers in Buenos Aires.

…The Argentine peso has declined 13 percent against the dollar in the past six months, less than the 32.7 percent drop seen in Brazil’s currency the Real. That gap has led Argentine manufacturers to call for a weaker peso they say will help them compete with factories in neighboring Brazil. Is the U.S. dollar headed in the same direction>