Nov. 28 (Bloomberg) -- Mexico’s peso rose for the first time in three days as U.S. lawmakers said they are optimistic that they can reach a budget agreement, boosting the economic outlook for the Latin American country’s top trading partner.
The currency gained 0.4 percent to 12.9896 per U.S. dollar at 2:22 p.m. in Mexico City after reversing an earlier decline of as much as 0.3 percent. The peso is up 7.3 percent this year, the best performance among the greenback’s 16 most-traded counterparts.
President Barack Obama and U.S. lawmakers are under pressure to reach a compromise to avoid $607 billion in spending cuts and tax increases set to take effect in January. The peso reversed earlier losses as Republican House Speaker John Boehner told reporters he’s optimistic budget talks can “avert this crisis sooner rather than later.” Obama said he hopes a deal can be reached before Christmas. Mexico sends about 80 percent of its exports to the U.S.
“Everything is being driven by headlines on the prospects of a deal getting done,” Alex Silva, who manages and advises on about $800 million of emerging-market assets, including the peso, at Silva Capital Management, said in a telephone interview from Chicago.
Yields on Mexico’s peso bonds due in 2022 fell one basis point, or 0.01 percentage point, to 5.52 percent. The price increased 0.05 centavo to 107.24 centavos per peso.
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