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(Corrects peso’s year-to-date gain in second paragraph.)
Mexico’s peso fell for a third day as concern that Greece may need another bailout damped demand for higher-yielding assets and the outlook for global growth.
The peso slid 0.4 percent to 12.8028 per U.S. dollar at 3 p.m. in Mexico City, from 12.7549 yesterday. The peso has gained 8.8 percent this year, the most among major currencies tracked by Bloomberg. Mexico’s peso is headed to its biggest quarterly rally since the currency was revalued in 1993.
The peso is falling on concern that the European debt crisis, which helped make the currency Latin America’s worst- performer in 2011, may worsen, according to Aryam Vazquez, an emerging-markets economist at Wells Fargo & Co. Greece will probably have to restructure its debt again and may involve bailout partners such as the International Monetary Fund, Moritz Kraemer, head of sovereign ratings at Standard & Poor’s, said at an event in London late yesterday.
“It’s very premature that the markets were somewhat less focused on Europe,” Vazquez said today from New York in a telephone interview. The region is “far from out of the woods.”
Spanish bonds fell as a general strike by the nation’s unions highlighted the challenges facing euro-area governments as they seek to cut costs and reduce deficits. Italian notes also slid.
The yield on peso-denominated debt due in 2024 rose one basis point, or 0.01 percentage point, to 6.49 percent, according to data compiled by Bloomberg. The price fell 0.12 centavo to 130.29 centavos per peso.
Mexico plans to hold a syndicated auction of 30-year fixed- rate peso bonds in the second quarter while maintaining the sale of other securities including short-term bills known as Cetes, the Finance Ministry said after markets closed yesterday.
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