Mexico’s Peso Advances in Pena Nieto’s Second Week as President

Mexico’s peso headed for its second weekly advance as speculation grew that President Enrique Pena Nieto will persuade the nation’s lawmakers to rally behind his plans to boost growth and fiscal stability.

The peso rose 0.5 percent to 12.7423 per U.S. dollar at 4 p.m. in Mexico City and has appreciated 0.8 percent since Dec. 7, the most among major Latin American currencies tracked by Bloomberg. It has strengthened 9.4 percent this year.

The peso is reflecting “the confidence of foreign investors in the local market,” Mario Copca, a strategist at Metanalisis SA in Mexico City, said in a phone interview. “There have been political agreements, which had been hard to come by in previous years.”

Pena Nieto, who took office Dec. 1, pushed this week for a balanced 2013 budget, and the Senate followed the lower house yesterday in approving the revenue portion. The progress adds to speculation that Pena Nieto will win approval for economic overhauls that boost private investment in the energy industry and increase tax revenue.

State-run Petroleos Mexicanos has had a monopoly on production, exploration and refining since President Lazaro Cardenas nationalized the oil industry in 1938.

The difference in the number of wagers by hedge funds and other large speculators on an advance in the peso compared with those on a drop -- so-called net longs -- rose to a record 149,271 on Dec. 11, compared with net longs of 118,962 a week earlier, according to data from the Washington-based Commodity Futures Trading Commission.

Yields on peso bonds due in 2024 fell two basis points, or 0.02 percentage point, to 5.46 percent, according to data compiled by Bloomberg. The price rose 0.20 centavo to 139.87 centavos per peso.

To contact the reporter on this story: Jonathan J. Levin in Mexico City at jlevin20@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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