Mexico Peso Rises as Greece Austerity Plan Boosts Export Outlook

Mexico’s peso jumped the most in a week after Greek lawmakers approved austerity plans to secure rescue funds, boosting demand for higher-yielding assets.

The peso gained 0.8 percent to 12.6982 per U.S. dollar at the close in Mexico City, from 12.8021 on Feb 10. It was the biggest increase since Feb. 3. The peso has gained 9.7 percent this year, the most among major currencies tracked by Bloomberg.

“Aversion to risk has declined, so this helps all emerging markets,” Roberto Galvan, a currency trader at Intercam Casa de Bolsa SA, said by phone from Mexico City.

While data showed today that Mexico’s industrial production rose 2.8 percent in December from a year earlier, manufacturing “is still behaving relatively well,” Rafael Camarena, a Mexico City-based economist at Banco Santander SA, said by phone. Manufacturing output rose 3.7 percent in December from a year earlier, compared with a 4 percent annual expansion in November, the national statistics agency said on its website.

Germany and the European Commission welcomed Greek approval of the austerity steps demanded for a financial lifeline, suggesting euro finance chiefs will pull Greece back from the brink when they meet in two days. Euro-area finance chiefs will convene in Brussels on Feb. 15 for their second extraordinary meeting on Greece in a week.

The Greek parliament’s backing “is a crucial step forward toward the adoption of the second program,” EU Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Brussels today.

The yield on peso-denominated debt due in 2024 fell nine basis points, or 0.09 percentage point, to 6.45 percent, according to data compiled by Bloomberg. The price of the securities rose 1.00 centavo to 130.92 centavos per peso.

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