Mexico’s peso fell the most in twelve weeks as mounting concern that global growth is faltering damped demand for the Latin American country’s higher-yielding assets.
The peso weakened 1.3 percent to 13.0011 per U.S. dollar at 4 p.m. in Mexico City, from 12.8354 yesterday. The decline was the biggest since it fell 1.8 percent on Dec. 12. The drop pared gains for the year to 7.2 percent.
Europe’s economy contracted in the fourth quarter as investment fell by the most since 2009 and exports and consumer spending dropped. Data yesterday showed U.S. factory orders declined and China announced the lowest growth target since 2004. Twenty-three of 25 major emerging-market currencies tracked by Bloomberg weakened against the dollar today.
“This is a heavy week in terms of data and events,” Flavia Cattan-Naslausky, a currency strategist at RBS Securities Inc. in Stamford, Connecticut, said by phone. “I don’t think these recent numbers have reversed the sentiment on growth yet, but we’ve come actually from a very strong period of economic indicators. So it’s almost like the market was used to getting upside surprises in the indicators and then we get some sort of disappointment here and that’s that first reaction.”
Mexico sold all 7 billion pesos of 27-day Cetes and 8 billion pesos of the 91-day securities it offered today, the central bank said on its website. The government also sold all 8.5 billion pesos in 182-day bills it auctioned and 9.5 billion pesos of the 336-day bills it offered, the bank said.
The yield on the country’s peso-denominated debt due in 2024 fell seven basis points, or 0.07 percentage point, to 6.50 percent, according to data compiled by Bloomberg. The price rose 0.76 centavo to 130.24 centavos per peso.