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Mexico’s peso rose the most in two weeks as speculation the Federal Reserve may act soon to shore up U.S. economic growth boosted the outlook for Latin America’s second-biggest economy.
The peso appreciated 0.5 percent to 13.0739 per dollar at 4 p.m. in Mexico City, extending its rally this year to 6.6 percent, the biggest among the 16 most-traded counterparts tracked by Bloomberg. The currency earlier touched 13.2177, the weakest intraday level since Aug. 17.
The peso reversed losses after minutes from the Fed’s last policy meeting showed many policy makers favored more monetary easing. Mexico depends on exports for about 30 percent of its gross domestic product, and sends 80 percent of them to its northern neighbor.
The peso “is reacting favorably to the minutes in that there could be another round of monetary stimulus,” Rafael Camarena, an economist at Banco Santander SA (SAN), said by phone from Mexico City. “It would help the U.S. economy and therefore would be good news for Mexico.”
Mexico’s economy may expand 3.7 percent this year after growing 3.9 percent last year, compared with a 2.2 percent projection for the U.S., according to the median estimates of economists surveyed by Bloomberg.
“Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” according to the minutes of the Federal Open Market Committee’s July 31- Aug. 1 meeting, released today in Washington.
The yield on Mexican local-currency bonds due in 2024 fell five basis points, or 0.05 percentage point, to 5.57 percent, according to data compiled by Bloomberg. The price rose 0.53 centavo to 139.44 centavos per peso.
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