In what has been a tumultuous 2014 for Latin American currencies, it is the quetzal that has stood out as the lone bright spot.
That’s right, the quetzal -- Guatemala’s currency.
As the Argentine peso sank 24 percent and the Brazilian real dropped 12 percent, the quetzal advanced 3 percent, posting its best annual rally since 2010.
The divergence comes down in large part to the strengthening U.S. economy. While the pickup fueled speculation the Federal Reserve will raise interest rates next year, luring investment away from the region’s bigger financial markets, it put more money in the pockets of immigrant workers from places like Guatemala. That extra cash translated into an 8 percent jump in remittances in the first 11 months of the year, to $5 billion. In a country with a gross domestic product of just $54 billion, those inflows move markets.
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