Mexico Peso Reaches Nine-Month High as Economic Confidence Rises
Mexico’s peso rose as stronger-than- forecast growth and speculation that the government will pass legislation to boost gross domestic product fueled confidence in Latin America’s second-biggest economy.
The currency advanced 0.6 percent to 12.6526 per U.S. dollar at 9:05 a.m. in Mexico City, according to data compiled by Bloomberg. It earlier rose to the highest intraday level since March 27. The peso has rallied 1.6 percent this year.
Mexico’s peso increased the most among major Latin American currencies after the government said the economy expanded in October from a year earlier at the fastest pace since July. The political outlook remains “supportive” for legislative changes that President Enrique Pena Nieto is trying to pass to boost economic growth, Bank of Nova Scotia (BNS) wrote today in a note to clients.
“Big players are getting into the peso,” Ramon Cordova, a currency trader at Banco Base SA in San Pedro Garza Garcia, Mexico, said in a phone interview. The economic data showing stronger-than-forecast growth “is an additional push on the peso.”
Mexico’s economy expanded 4.33 percent in October from a year earlier, the national statistics agency said today on its website. The increase in the global economic indicator, a proxy for gross domestic product, was expected to be 3.85 percent, according to the median estimate of 16 analysts surveyed by Bloomberg.
The number of wagers by hedge funds and other large speculators for a gain in the peso outnumbered those for a decrease in the futures market by 141,752 last week, up from 86,787 in November.
The yield on fixed-rated peso bonds due in 2024 was little changed at 5.5 percent, according to data compiled by Bloomberg. The price rose 0.01 centavo to 139.33 centavos per peso.
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