Bloomberg News

Mexico Peso Reaches Two-Week High as China Boosts Global Outlook

November 22, 2012

Mexico’s peso touched its strongest level in two weeks as signs that China’s manufacturing is rebounding helped boost optimism in the global economy and the outlook for exports from the Latin American country.

The currency advanced 0.2 percent to 13.0298 per U.S. dollar at 4 p.m. in Mexico City, extending this year’s rally to 7 percent, the biggest among the dollar’s 16 most-traded counterparts tracked by Bloomberg. It earlier touched 12.9895 per dollar, the highest value since Nov. 7. Yields on inflation- linked debt fell after the government reported prices rose by more than forecast during the first half of the month.

The peso rallied after a survey that indicated the first expansion in China’s factory output in 13 months fueled optimism the world’s second-largest economy is recovering, according to Eduardo Suarez, a Latin America strategist at Bank of Nova Scotia. Concern about slowing global expansion helped fuel a 1.3 percent fall in the peso over the past two months.

“It’s the whole growth story,” Suarez said by telephone from Toronto. “Global sentiment was weighing on it and now that sentiment is improving, it is rebounding.”

The preliminary reading of a Chinese purchasing managers’ index released today by HSBC Holdings Plc and Markit Economics was 50.4 for November. It compares with a final level of 49.5 for October. Markets in the U.S., the chief destination for Mexican exports, are closed for the Thanksgiving holiday.

Mexico’s consumer prices rose more than economists forecast in the first half of November. Prices climbed 0.79 percent, the national statistics agency said on its website today, compared with the 0.72 percent median estimate of 18 analysts surveyed by Bloomberg.

Yields on inflation-linked securities known as Udibonos due in December 2013 fell five basis points, 0.05 percentage point, to 0.26 percent, according to data compiled by Bloomberg.

Yields on Mexico’s peso bonds due in 2024 rose four basis points to 5.57 percent, according to data compiled by Bloomberg. The price fell 0.48 centavo to 138.79 centavos per peso.

To contact the reporter on this story: Ben Bain in Mexico City at bbain2@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net


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