Mexico's Peso Weakens for a Second Straight Day as Global Stocks Decline

Mexico’s peso weakened for a second day as global stocks fell, paring investor demand for higher- yielding, emerging-market assets.

The peso dropped 0.9 percent to 13.0623 per U.S. dollar at 5 p.m. New York time, from 12.9386 yesterday. The decline reduced the currency’s gain to 0.2 percent this year.

“The peso is following volatility across international markets,” said Omar Martin del Campo, a trader at Banco Ve Por Mas SA in Mexico City. “The worry is it could fall again because of a lengthening of the recession, since we’re still seeing some bad data.”

The MSCI World Index dropped 1.1 percent, and the Standard & Poor’s 500 Index lost 1.2 percent.

“For the time being, I think we’ll keep tracking global stocks,” said Clyde Wardle, an emerging-market currency strategist at HSBC Holdings Plc in New York.

The peso could appreciate to around 12.80 against the U.S. dollar toward the end of the month on possible measures by the U.S. government to prevent the economy from slowing, Martin del Campo said. Mexico sells 80 percent of its exports to the U.S.

The yield on Mexico’s 10 percent bond due in 2024 fell five basis points, or 0.05 percentage point, to 6.61 percent, according to Banco Santander SA. The price rose 0.54 centavo to 131.22 centavos per peso.

To contact the reporter on this story: Jonathan Roeder in Mexico City at jroeder@bloomberg.net

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