Mexico Peso Gains to Strongest Level Since June on Earnings, U.S. Stocks

Mexico’s peso rose to the strongest level since June as stock-index futures in the U.S. rallied after European banks reported better-than-expected earnings, signaling the economic recovery has not slowed down.

The peso gained 0.5 percent to 12.5830 per dollar at 9:03 a.m. New York time, from 12.6453 on July 30. The currency has gained 4 percent against the U.S. dollar this year, the second- best performer among the 16 major currencies tracked by Bloomberg, after Japan’s yen. The peso reached 12.5366 earlier, the strongest level since June 22.

“The market is in a different place than where we were three or four weeks ago,” said Ramon Cordova, a currency strategist at Base Internacional Casa de Bolsa SA in Monterrey, Mexico. “There have been good economic data and earnings, and we continue to see a strong correlation between the peso and markets.”

HSBC Holdings Plc, Europe’s largest bank, said pretax profit more than doubled, and BNP Paribas said net income rose 31 percent. Standard & Poor’s 500 Index futures gained 1.4 percent. The U.S. purchases about 80 percent of Mexico’s exports.

The yield on the 10 percent bonds due in 2024 fell two basis points, or 0.02 percentage point, to 6.82 percent, according to Banco Santander SA, the lowest level since the security was issued in 2005. The price of the security rose 0.2 centavo to 129.03 centavos per peso.

To contact the reporter on this story: Andres R. Martinez in Mexico City at amartinez28@bloomberg.net

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