July 14 (Bloomberg) -- Mexico's 20-year peso-denominated bond rose, snapping four days of declines, on expectations a court challenge of the July 2 election results will fail and Felipe Calderon will be named the next president.

Government bonds of all maturities rallied and the peso rose the most against the dollar of 71 currencies tracked by Bloomberg. The gains show opposition contender Andres Manuel Lopez Obrador's claims of election fraud and voting irregularities lose credibility among investors, said Pablo Septien, who manages $350 million of bonds at Finaccess Mexico SA. Lopez Obrador has challenged results showing that Calderon won the election.

``Sooner or later Calderon will be confirmed, that's for sure,'' Septien said in a phone interview from Mexico City. Calderon's pledge to maintain policies that cut debt and curbed spending will spur economic growth, he said.

The yield on the 10 percent bond that matures in December 2024 fell 5 basis points, or 0.05 percentage point, to 8.96 percent as of 5:38 p.m. New York time. The price, which moves inversely to the yield, rose 0.44 centavo to 109.29 centavo, according to Santander Central Hispano SA.

Lopez Obrador is planning a second protest this weekend after his July 8 rally in downtown Mexico City drew 280,000 supporters, according to the city's police. Lopez Obrador's campaign expected as many as 1 million people to attend.

Diminishing support for Lopez Obrador's claims will ensure a quick confirmation for Calderon by the country's electoral court, said Septien. The electoral court has until Aug. 31 to decide on Lopez Obrador's challenge.

``If all goes as planned, we'll see the peso trade at 10.80 per dollar and the 20-year bond yield fall to 8.5 percent,'' Septien said.

The peso soared 0.8 percent to 10.9775 per dollar, a two- month high.

Last Updated: July 14, 2006 17:54 EDT