Oct. 10 (Bloomberg) -- Mexico’s peso rose to the strongest level in more than two weeks as oil gained and French and German leaders pledged to present a European bank recapitalization plan, damping concern the global economy will fall into recession.
The peso advanced 1.7 percent to 13.2374 per U.S. dollar at 4 p.m. Mexico City time, from 13.4598 on Oct. 7. It earlier touched 13.2257, the strongest since Sept. 21. The currency has dropped 6.8 percent this year.
German Chancellor Angela Merkel and French President Nicolas Sarkozy said yesterday they will deliver a plan to recapitalize European banks and address the Greek debt crisis by the Nov. 3 Group of 20 summit. Oil, Mexico’s second-biggest export, climbed 2.8 percent in New York.
“You’ve got a rally in commodities for four days in a row,” Marc Chandler, global head of currency strategy at Brown Brothers in New York, said in a phone interview. The backdrop behind the peso’s rise is the economic outlook in “not just Europe, but also better growth from the U.S.,” he said.
Employers in the U.S., the destination of about 80 percent of Mexico’s exports, added more jobs than forecast in September, Labor Department data showed Oct. 7.
The yield on Mexico’s benchmark peso-denominated bonds due in 2024 fell eight basis points, or 0.08 percentage point, to 6.64 percent, according to data from Banco Santander SA. The price of the securities rose 0.80 centavo to 129.44 centavos per peso.
Traders didn’t trigger any of the dollar options available today, the central bank said on its website. The central bank has been buying as much as $600 million through the options every month since March 2010 to bolster foreign reserves.
--Editors: Richard Richtmyer, David Papadopoulos
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