Mexican Peso Surges to Strongest Since April on Fed Bond Buying
Mexico’s peso climbed to a five- month high amid growing optimism the Latin American nation will benefit from further Federal Reserve stimulus in the U.S.
The peso advanced 0.8 percent to 12.7149 per U.S. dollar at 4 p.m. in Mexico City, after earlier touching 12.7090 per dollar, the strongest intraday level since April 3. The currency has gained 2.1 percent this week.
The Fed pledged yesterday to buy bonds until the world’s largest economy recovers and said it would keep interest rates near zero at least until mid 2015. Mexico sends about 80 percent of its exports to the U.S.
“When London and Asia had a chance to buy the Mexican peso after the news, we saw a continuation” of the currency’s gains, Benito Berber, a Latin America strategist at Nomura Holdings Inc., said by phone from New York. “The tone has remained positive.”
Yields on Mexico’s peso bonds due in 2024 climbed five basis points, or 0.05 percentage point to 5.73 percent today, according to data compiled by Bloomberg. The price fell 0.50 centavo to 137.52 centavos per peso.
To contact the reporter on this story: Jonathan J. Levin in Mexico City at firstname.lastname@example.org
To contact the editor responsible for this story: David Papadopoulos at email@example.com