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Oct. 21 (Bloomberg) -- Mexico’s peso had its steepest weekly drop in a month as Europe’s debt crisis undermined demand for emerging-market currencies.
The peso has lost 3.2 percent since Oct. 14 to 13.6752 per U.S. dollar, following a 1.6 percent gain in the previous week. The decline this week is the biggest among 25 emerging-market currencies tracked by Bloomberg.
The peso touched its lowest level since Oct. 3 yesterday amid concern that European policy makers will fail to agree on measures to contain the euro-area debt crisis, including emerging-market currencies. European finance ministers gathered in Brussels today at the start of six days of talks and summits aimed at agreeing on a plan to save Greece from default and shield the region’s banks.
“We are still trading on European headlines,” said Flavia Cattan-Naslausky, a currency strategist at RBS Securities Inc. in Stamford, Connecticut. “It underscores the fragile risk sentiment. The Mexican peso shouldn’t be lagging so much anymore. We have had pretty decent U.S. growth numbers.”
The Bloomberg JPMorgan Latin American Currency Index fell 2.4 percent this week.
The yield on the country’s benchmark peso-denominated bond due in 2024 rose 16 basis points, or 0.16 percentage point, this week to 6.59 percent, according to data compiled by Bloomberg. The price of the security fell 1.74 centavos to 129.86 centavos per peso.
-- With assistance from Ye Xie in New York. Editors: Brendan Walsh, Marie-France Han
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