Mexico Peso Drops After U.S. Durable Goods Damp Export Outlook

Mexico’s peso weakened after orders for U.S. durable goods fell in March by the most in seven months, rekindling concern that the recovery in the Latin American country’s biggest trading partner is faltering.

The currency depreciated 0.3 percent to 12.2790 per dollar at 9:12 a.m. in Mexico City. The currency is still up 4.7 percent in 2013, the biggest rally among the greenback’s 16 major counterparts tracked by Bloomberg.

The peso slipped today after a U.S. Commerce Department report showed bookings for goods meant to last at least three years decreased 5.7 percent, more than forecast by analysts surveyed by Bloomberg, after a revised 4.3 percent gain the prior month that was smaller than previously estimated. Mexico sends about 80 percent of its exports to its northern neighbor.

“The headline number was very bad,” Ramon Cordova, a currency trader at Banco Base SA in San Pedro Garza Garcia, Mexico, said in a telephone interview.

Mexico’s inflation-linked bond yields rose after a report today from the national statistics agency showed consumer prices fell 0.09 percent in the first two weeks of April from the end of March.

Yields on inflation-linked debt maturing in December increased five basis points, or 0.05 percentage point, to 1.70 percent, according to data compiled by Bloomberg. Yields on fixed-rate peso bonds due in 2024 rose two basis points to 4.64 percent.

To contact the reporter on this story: Ben Bain in Mexico City at bbain2@bloomberg.net

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

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