Mexico’s peso jumped the most in a month after Federal Reserve officials signaled policy makers in the U.S., which buys about 80 percent of the Latin American country’s exports, will continue stimulus measures.
The peso rose 1 percent to 13.0309 per dollar at 4 p.m. in Mexico City. It has advanced 6.9 percent this year.
Federal Reserve Vice Chairman Janet Yellen in a speech last night endorsed the Fed’s view that U.S. borrowing costs are likely to stay low through 2014. While the economic recovery in the U.S. has helped make the peso the best-performing major currency in 2012, it tumbled 1.4 percent on April 10 amid concern the pace of the expansion in the world’s biggest economy is slowing.
The peso’s depreciation earlier this week represented “an overshoot,” Roberto Galvan, a currency trader at Intercam Casa de Bolsa SA, said by phone from Mexico City. “Markets are calmer after the statements” from Yellen, he said.
William C. Dudley, president of the Federal Reserve Bank of New York said today that he agrees with the Fed’s March 13 statement backing low rates through at least late 2014. “I haven’t seen any set of information that would suggest to me we should change that view,” he said.
Mexico’s gross domestic product may rise closer to 4 percent this year, rather than the 3.5 percent the government has forecast, should the U.S. economy keep improving, central bank Governor Agustin Carstens said in February in Mexico City.
The peso also rallied today after the nation’s Automobile Industry Association said Mexican production of cars and light trucks rose 9.4 percent in March from the year-earlier period, according to Rafael Camarena, an economist at Banco Santander SA.
The yield on Mexico’s peso-denominated debt due in 2024 rose one basis point, or 0.01 percentage point, to 6.33 percent, according to data compiled by Bloomberg. The price fell 0.14 centavo to 131.92 centavos per peso.
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