Mexico’s Peso Advances for Third Day as U.S. Retail Sales Gain

Mexico’s peso rose for a third day as U.S. retail sales increased more than forecast, bolstering speculation that economic growth of Mexico’s largest trade partner is accelerating.

The currency appreciated 0.5 percent to 12.8035 per U.S. dollar at 4 p.m. in Mexico City, extending its rally in 2012 to 8.8 percent, the best performance among the dollar’s 16 most-traded counterparts tracked by Bloomberg.

“Today’s data show the U.S. is expanding at a more dynamic pace,” said Juan Carlos Alderete, a currency strategist at Grupo Financiero Banorte SAB in Mexico City. “This will provide some support to the peso, but we need to be cautious as we depend on news coming from Spain and Greece.”

The peso got a boost from speculation Spain is moving closer to requesting a sovereign bailout, easing concern Europe’s sovereign-debt crisis will get worse. European Union leaders will meet in Brussels on Oct. 18-19. Spain’s Economy Minister Luis de Guindos said over the weekend in Tokyo that he was “extremely comfortable” with his country’s ability to fund itself through 2012.

U.S. retail sales advanced 1.1 percent in September, the Commerce Department reported today. The median forecast of 77 economists surveyed by Bloomberg called for a 0.8 percent gain.

Banorte projects the Mexican peso will advance to 12.50 per U.S. dollar by the end of the year.

Yields on Mexico’s peso bonds due in 2024 increased two basis points, or 0.02 percentage point, to 5.42 percent today, according to data compiled by Bloomberg. The price fell 0.25 centavo to 140.76 centavos per peso.

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