Mexican Peso Posts First Monthly Decline in 2012 on Sapped Risk

Mexico’s peso posted its first monthly decline this year as rising borrowing costs in Europe damped demand for higher-yielding assets in emerging markets.

The peso weakened 0.3 percent to 13.0127 per U.S. dollar at 4 p.m. in Mexico City, compared with 12.9678 on April 27. The currency has fallen 1.6 percent in April, paring its rally in 2012 to 7.1 percent, still the best performance among the 16 most-traded currencies tracked by Bloomberg.

“Once again we saw higher volatility in the financial markets associated with Spain and Europe in general,” Rafael Camarena, an economist at Banco Santander SA, said in a telephone interview from Mexico City. “That’s what generated this move.”

Spanish bond yields have climbed about 1 percentage point since the beginning of March as the government struggles to persuade investors it can narrow its budget deficit, adding to concern Europe’s debt turmoil is spreading.

The yield on Mexico’s benchmark bonds due in 2024 was little changed at 6.31 percent. The price fell 0.04 centavo to 132.00 centavos per peso, paring its increase to 1.47 centavos per peso this month.