Mexican Peso Rises on Optimism European Ministers to Reach Greece Accord
Mexico’s peso rose, extending the biggest rally among major currencies this year, as investors stepped up purchases of higher-yielding assets on speculation that European leaders will agree on a bailout for Greece.
The peso strengthened 0.5 percent to 12.6934 per U.S. dollar at the close in Mexico City, from 12.7593 on Feb. 17. It has gained 9.8 percent this year, the most among 16 major currencies tracked by Bloomberg.
European finance ministers meet in Brussels today in an attempt to avoid a Greek sovereign default. The ministers are weighing the terms of new loans to Greece and a possible contribution by central banks at a meeting today in Brussels. They also aim to start a bond exchange with private investors meant to stave off a Greek bankruptcy next month.
Speculation that leaders “were about to reach an agreement made the markets take on a positive trend,” said Ramon Cordova, a currency trader at Banco Base SA in Monterrey, Mexico. Recent “good data” signaling a U.S. economic recovery also is fueling the peso’s rally, he said.
Reports last week showed the index of U.S. leading indicators rose in January and the cost of living climbed less than forecast, pointing to sustained economic growth with limited price pressures. Markets in the U.S., the destination for 80 percent of Mexican exports, are closed today for the Presidents’ Day holiday.
The yield on peso-denominated debt due in 2024 declined three basis points, or 0.03 percentage point, to 6.47 percent, according to data compiled by Bloomberg. The price of the securities rose 0.27 centavo to 130.66 centavos per peso.
To contact the reporter on this story: Ben Bain in Mexico City at email@example.com
To contact the editor responsible for this story: David Papadopoulos at firstname.lastname@example.org
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.