How were the peg exchange rates broken in Mexico in 1994 and Asia in the 1990 s? The market forces (demand and supply) were too weak to overwhelm government actions Foreign investors trusted central banks of these economies would always be able to take actions to peg their currencies because of the high foreign currency reserves Mexican central bank intervened too much, while Asian central banks did not intervene enough to maintain their currency stability Mexico experienced a large balance of trade deficit and an overvalued peso; Asian ceonomies weakened, causing institutionalinvestors to withdraw their funds