Mexico’s peso extended its biggest weekly gain since September as signs of a global recovery boosted the outlook for the Latin American country’s exports.
The currency appreciated 0.5 percent to 12.9647 per U.S. dollar at 4 p.m. in Mexico City, boosting this week’s rally to 1.3 percent. The peso has strengthened 7.5 percent this year, the most among the dollar’s 16 most-traded counterparts tracked by Bloomberg.
The peso gained along with most of its emerging-market peers today after a report showed German business confidence unexpectedly rose in November from the lowest in 2 1/2 years. The peso rose yesterday after a survey indicated the first expansion in China’s factory output in 13 months.
“There haven’t been catastrophes externally,” Ramon Cordova, a currency trader at Banco Base SA in San Pedro Garza Garcia, Mexico, said in telephone interview. “The outlook for Mexico is getting better and better.”
The Munich-based Ifo institute said today its business climate index climbed to 101.4 in November from 100, the first gain in eight months. Economists predicted a drop to 99.5. A U.S. Commerce Department report on Nov. 20 showed that housing starts rose 3.6 percent to an annual pace of 894,000, the fastest since July 2008. Mexico sends about 80 percent of its exports to the world’s biggest economy.
Yields on Mexico’s peso bonds due in 2024 rose three basis points, 0.03 percentage point, to 5.6 percent, according to data compiled by Bloomberg. The price fell 0.23 centavo to 138.55 centavos per peso. The yield is up 13 basis points this week.
To contact the reporter on this story: Ben Bain in Mexico City at firstname.lastname@example.org
To contact the editor responsible for this story: Brendan Walsh at email@example.com