Nov. 29 (Bloomberg) -- Mexico’s peso closed at its highest level in five weeks as optimism that U.S. lawmakers will reach a budget agreement boosted the outlook for growth in the Latin American nation’s top export market.
The peso climbed 0.2 percent to 12.9469 per dollar at 4 p.m., its strongest close since Oct. 22. The currency has increased 7.6 percent in 2012, the biggest advance among the dollar’s 16 most-traded counterparts.
“There’s a certain optimism” that the U.S. will avoid the budget changes known as the fiscal cliff, Rafael Camarena, an economist at Grupo Financiero Santander Mexico SAB, said in a telephone interview from Mexico City. “The market appears to have more confidence that they could reach a deal. That’s surely what’s helping the peso today.”
Mexico’s central bank will hold the target lending rate at a record low 4.5 percent in a decision due to be released tomorrow, 21 of 22 economists in a Bloomberg survey forecast. One predicts policy makers will increase it to 4.75 percent.
Yields on peso bonds due in 2024 rose two basis points, or 0.02 percentage point, to 5.59 percent, according to data compiled by Bloomberg. The price fell 0.24 centavo to 138.56 centavos per peso.
Democratic Senator Chuck Schumer said in a news conference there has been progress in talks and White House spokesman Jay Carney said the administration is optimistic about the negotiations. President Barack Obama and U.S. lawmakers are under pressure to reach a deal to avoid $607 billion in spending cuts and tax increases set to take effect in January.
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