Mexico Peso Rises as U.S. Jobs Report Boosts Economic Confidence

Mexico’s peso rose for a second day as an unexpected decline in U.S. jobless claims boosted the outlook for Latin America’s second-biggest economy.

The peso advanced 0.4 percent to 13.0864 per dollar at 4 p.m. in Mexico City. Today’s gain boosted its rally this year to 6.5 percent, the biggest gain among the dollar’s 16 most-traded counterparts tracked by Bloomberg.

The currency rose after Labor Department data showed today that jobless claims in the U.S. unexpectedly dropped by 6,000 to 361,000 in the week ended Aug. 4. Mexico depends on exports for about 30 percent of its gross domestic product, sending 80 percent of the goods and services to its northern neighbor.

The better than expected U.S. unemployment data “helps improve the confidence in the local market,” Mario Copca, a currency strategist at Metanalisis SA, said in a telephone interview in Mexico City.

The yield on Mexican local-currency bonds due in 2024 rose four basis points, or 0.04 percentage point, to 5.52 percent, according to data compiled by Bloomberg. The price fell 0.42 centavo to 140.07 centavos per peso.

Annual inflation accelerated to 4.42 percent in July from 4.34 percent the month before, the national statistics institute said today on its website, in line with the median estimate of 12 economists surveyed by Bloomberg. In the month, prices climbed 0.56 percent.

Yields on inflation-linked bonds, known as Udibonos, due in December 2013 rose one basis point, or 0.01 percentage point, to 0.14 percent, according to data compiled by Bloomberg.

To contact the reporter on this story: Ben Bain in Mexico City at bbain2@bloomberg.net

To contact the editors responsible for this story: Jose Enrique Arrioja at jarrioja@bloomberg.net; David Papadopoulos at papadopoulos@bloomberg.net

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