Mexico’s peso gained on speculation the Federal Reserve will do more to stimulate the U.S. economy, the main destination for the Latin American nation’s exports.
The peso appreciated 0.8 percent to 13.9767 per dollar at 4 p.m. in Mexico City. The advance pared the currency’s loss this year to 0.3 percent.
Mexico depends on exports for about 30 percent of its gross domestic product, sending 80 percent of them to its northern neighbor. Federal Reserve Bank of Chicago President Charles Evans said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu airing today that he would support more stimulus. Evans doesn’t vote on the Federal Open Market Committee this year.
Evans’s comments are helping fuel the rally in the peso in the absence of relevant economic data, Mario Copca, a currency strategist at Metanalisis SA, said in phone interview from Mexico City. “It’s a very cautious market that’s very tied to expectations of what could happen in European markets, and this is what’s causing the continuation of so much volatility” in the peso, he said.
Italy plans to auction at least 9.5 billion euros ($11.9 billion) of debt this week as yields climb for Europe’s most- indebted countries following Spain’s request for a bailout. Greece holds elections June 17 that may determine the country’s future in the euro.
The yield on Mexican local-currency bonds due in 2024 rose two basis points, or 0.02 percentage point, to 6.09 percent, according to data compiled by Bloomberg. The price fell 0.19 centavo to 134.20 centavos per peso.
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