Mexico’s peso advanced from its lowest level since January after a Spanish bill sale eased concern Europe’s sovereign-debt crisis is getting worse and bolstered demand for higher-yielding assets.
“The debt sold very well,” Ramon Cordova, a currency trader at Banco Base SA in San Pedro Garza Garcia, Mexico, said in a phone interview. “That is what is generating some risk appetite here in Mexico.”
Mexico’s currency has rallied 6.3 percent against its U.S. counterpart this year for the best performance among the 16 most-traded currencies tracked by Bloomberg. The currency gained as the economy of the U.S., Mexico’s biggest trading partner, showed signs of recovery.
The peso appreciated for the first time in three days, advancing 0.8 percent to 13.1070 per U.S. dollar at 4 p.m. in Mexico City. The currency touched 13.2960 yesterday, the weakest level since Jan. 19.
Mexico’s currency also climbed after the International Monetary Fund increased its outlook for global growth in 2012 to 3.5 percent from 3.3 percent and lifted its forecast for U.S. expansion to 2.1 percent from 1.8 percent. The U.S. is the destination of 80 percent of Mexican exports.
“It’s something that’s positive for the peso,” Cordova said.
Mexico’s economy will expand 3.5 percent this year, compared with a 3.9 percent expansion in 2011, according to the Finance Ministry. Latin America’s second-biggest economy after Brazil may grow “closer” to 4 percent this year if the U.S. economy continues to improve, Governor Agustin Carstens of the central bank said in February.
The yield on Mexico’s peso-denominated bonds due in 2024 fell six basis points, or 0.06 percentage point, to 6.25 percent today, according to data compiled by Bloomberg. The price rose 0.61 centavo to 132.68 centavos per peso.
Spain sold 3.18 billion euros ($4.18 billion) of bills, compared with a maximum target of 3 billion euros the Treasury set for the sale.
Mexico sold all 7 billion pesos of 28-day Cetes and 8 billion pesos of the 91-day securities it offered today, the central bank said on its website. The country also sold all 8.5 billion pesos in 182-day bills it auctioned, the bank said.
The yield at auction on the one-month notes was 4.33 percent, an increase of 0.07 percentage point from the previous auction on April 10, the statement showed.