Mexico’s peso rose the most among major Latin American currencies after the region’s second- biggest economy expanded more than forecast in the 12 months through April.
The peso strengthened 1.2 percent to 13.7600 per dollar at 4 p.m. in Mexico City, the biggest gain since June 6. It has lost 6.9 percent this quarter.
Latin America’s second-biggest economy expanded 4.68 percent in April from a year earlier, according to data from the national statistics agency today, compared with a median estimate of 4.2 percent from 15 analysts surveyed by Bloomberg. While data today showed a drop in U.S. consumer confidence, another report indicated the housing market is firming in the country that is the chief destination for Mexico’s exports.
“At least in the first half of the year we think Mexico’s economy could grow at more than 4 percent,” Rafael Camarena, an economist at Banco Santander SA (SAN) in Mexico City, said by phone.
Mexico’s economy grew 3.9 percent last year. Gross domestic product will expand 3.5 percent to 4 percent this year, with growth nearer 4 percent if the U.S. recovers quickly, central bank Governor Agustin Carstens said in a radio interview broadcast on June 20.
The peso slid earlier after Spain sold three-month bills at a yield of 2.362 percent today, compared with 0.846 percent at the previous auction. Moody’s Investors Service cut the ratings of 28 Spanish banks yesterday as European leaders prepared to meet at a June 28-29 summit.
Speculation that Europe’s debt crisis will slow global growth and hurt the market for Mexican exports helped make the peso Latin America’s worst-performing major currency in 2011.
The yield on Mexican local-currency bonds due in 2024 dropped 16 basis points to 5.52 percent, according to data compiled by Bloomberg. The price rose 1.80 centavo to 140.39 centavos per peso.
Mexico sold all 7 billion pesos ($509 million) of 28-day Cetes and 8 billion pesos of the 91-day securities offered today, the central bank said on its website.
Mexico also sold all 8.5 billion pesos in 182-day bills it auctioned and 9.5 billion pesos in 336-day notes, the bank said.
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