Mexico’s peso fell the most in three months after Spain said its economy shrank last quarter, deepening concern that Europe’s debt crisis will erode global growth and curb demand for Latin American exports.
The currency tumbled 0.9 percent to 12.9752 per U.S. dollar at 4 p.m. in Mexico City. The slide, the biggest on a closing basis since July 23, pared the peso’s advance this year to 7.4 percent, still the best performance among the dollar’s 16 most- traded counterparts.
Developing-nation currencies slumped worldwide after a report showed Spain’s gross domestic product contracted for a fifth quarter, falling an estimated 0.4 percent.
“The uncertainty in Europe is one factor and a key one at that” for a weaker peso, Aryam Vazquez, an economist for global emerging markets at Wells Fargo & Co., said in an e-mailed message. “The ongoing saga with Spain is feeding into a stronger dollar.”
The peso also slumped as oil dropped to a three-month low in New York. Crude is Mexico’s second-biggest export.
Yields on Mexico’s local currency bonds due in 2024 rose one basis point, 0.01 percentage point, to 5.56 percent, according to data compiled by Bloomberg. The price decreased 0.15 centavo to 139.15 centavos per peso.
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