Feb. 10 (Bloomberg) -- Mexico’s peso had its biggest drop this year on concern that plans to help Greece avoid default were breaking down, curbing demand for higher-yielding emerging-market assets.
The peso weakened 1 percent to 12.8021 per U.S. dollar at the close in Mexico City, from 12.6708 yesterday. This represents the biggest loss since Dec. 27. The peso has jumped 8.9 percent this year, the second-most among a basket of 25 emerging-market currencies tracked by Bloomberg. The peso has declined 1.1 percent this week.
Emergency talks of euro-area finance chiefs broke up late last night with Luxembourg Prime Minister Jean-Claude Juncker saying Greece must turn its budget cuts into law, flesh out 325 million euros ($429 million) in spending reductions and have its major party leaders sign on to the program before upcoming elections. German Finance Minister Wolfgang Schaeuble told lawmakers in Berlin today that Greece is missing its debt-cutting targets, according to two people who took part in the meeting.
“The market expected a quicker, more concrete solution” for Greece, Ramon Cordova, a currency trader at Banco Base SA in Monterrey, Mexico, said in a telephone interview. “It hasn’t happened. That’s why we’re seeing this drop.”
The yield on Mexico’s peso-denominated bonds due in 2024 rose 11 basis points, or 0.11 percentage point, to 6.54 percent, according to data compiled by Bloomberg. The price of the securities dropped 1.1 centavo to 129.92 centavos per peso.
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