Mexico’s peso rose amid speculation the U.S. Federal Reserve may take longer than expected to cut back its stimulus program known as quantitative easing.
The peso appreciated 0.7 percent to 12.6227 per U.S. dollar at 11:04 a.m. in Mexico City, the biggest gain on a closing basis since Aug. 2. It has climbed 1.8 percent this year, the most among the dollar’s 16 most-traded counterparts.
“Everyone is expecting tapering in September,” Ramon Cordova, a trader at Banco Base SA in San Pedro Garza Garcia, Mexico, said in a telephone interview. “But without spectacular numbers, that tells you they might have to postpone it, and that’s bad for the dollar.”
The Bloomberg U.S. Dollar Index fell for a fifth day, the longest streak of declines in three months. U.S. payrolls rose by 162,000 workers in July, the fewest in four months, a government report showed last week. Mexico, Latin America’s second-biggest economy, sends about 80 percent of its exports to its northern neighbor.
Mexico’s annual inflation slowed to 3.47 percent in July, within the central bank’s target range of 2 percent to 4 percent for the first month since February. Consumer prices declined 0.03 percent from June, the national statistics agency reported, compared with the median forecast of an increase of 0.02 percent from 18 economists surveyed by Bloomberg.
To contact the editor responsible for this story: David Papadopoulos at email@example.com