Mexico’s Peso Rises for Third Day on Pena Nieto, U.S. Optimism

Mexico’s peso advanced for a third day on speculation U.S. politicians will reach a budget deal and President Enrique Pena Nieto’s policies will boost economic growth in the Latin American country.

The peso appreciated 0.4 percent to 12.8702 per U.S. dollar at 4 p.m. in Mexico City. The currency has rallied 8.3 percent this year, the biggest gain among the greenback’s 16 most-traded counterparts.

Pena Nieto has signaled in his first week in office that he will adopt measures to fuel growth in Latin America’s second-biggest economy. A day after being sworn in, he signed an accord with leaders of the three biggest political parties that included a pledge to allow competition for some of state-run Petroleos Mexicanos’s operations. The company has had a monopoly on production, exploration and refining since President Lazaro Cardenas nationalized the oil industry in 1938.

“There’s a certain optimism about the new government, political agreements and the possibility of reforms,” Rafael Camarena, an economist at Grupo Financiero Santander Mexico SAB, said in a phone interview from Mexico City. “Positive sentiment about eventual agreements regarding the fiscal issues in the U.S.” also is contributing to the peso’s advance.

About 80 members of the U.S. Congress, including Republicans and Democrats, signed a letter calling for an exploration of “all options” to break the political impasse over taxes for the highest-earnings Americans. Lawmakers are working to head off $600 billion of scheduled tax increases and spending cuts that may sap growth. Mexico ships about 80 percent of its exports to its northern neighbor.

U.S. Payrolls

U.S. employers added 85,000 jobs in November after an increase of 171,000 in the prior month, according to the median forecast of economists surveyed by Bloomberg before tomorrow’s report from the Labor Department. The unemployment rate probably held at 7.9 percent, according to the median forecast.

Yields on peso-denominated bonds due in 2024 fell one basis point, 0.01 percentage point, to 5.45 percent today, according to data compiled by Bloomberg. The price increased 0.09 centavo to 140.02 centavos per peso.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE