Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Mexican Peso Declines as Optimism on Europe Loan Program Fades

Dec. 21 (Bloomberg) -- Mexico’s peso weakened the most in a week as demand for higher-yielding assets declined amid waning optimism about a European Central Bank plan to fight the region’s debt crisis.

The peso dropped 0.3 percent to 13.8272 per U.S. dollar today, from 13.7845 yesterday. The peso has weakened 11 percent this year, the worst performance among Latin America’s major currencies.

Mexico’s currency dropped after the ECB’s announcement that it awarded a bigger-than-forecast amount of three-year loans to euro-area banks failed to squelch concern about the region’s debt crisis. The banks borrowed enough cash to refinance almost two-thirds of the debt they have maturing next year amid concern that markets will remain frozen.

“There was optimism initially, and afterward everything fell,” Ramon Cordova, a currency trader at Base Internacional Casa de Bolsa in Monterrey, Mexico, said by phone. “The peso is following. We’re almost at the holidays, so volumes decrease and movements appear very volatile.”

Yesterday the peso advanced the most in a week as better-than-forecast U.S. housing data improved the outlook for Mexican exports to its biggest trading partner.

The central bank said it didn’t sell dollars or receive offers in the three auctions it held today.

The yield on Mexico’s benchmark peso-denominated bond due in 2024 fell seven basis points, or 0.07 percentage point, to 6.59 percent, according to data compiled by Bloomberg. The price of the security rose 0.76 centavo to 129.68 centavos per peso.

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

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

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.