Mexico’s peso touched a one-week low as U.S. lawmakers struggled to head off scheduled tax increases and spending cuts that may push the Latin American country’s biggest export market into recession.
The peso was little changed at 12.7612 per U.S. dollar at 4 p.m. in Mexico City after earlier slipping to 12.7986, the weakest intraday level since Dec. 14. The currency has climbed 9.2 percent this year, the most among the dollar’s 16 most-traded counterparts.
U.S. House Republicans plan to vote today on a tax increase for top earners, which they had previously said would destroy jobs. Lawmakers and President Barack Obama are trying to reach a compromise on tax rates as part of a bid to avert the more than $600 billion in spending cuts and tax increases due to start next month. Mexico sends about 80 percent of its exports to the world’s biggest market.
The peso pared earlier losses after the U.S. Commerce Department reported a revised 3.1 percent increase in gross domestic product in the third quarter, exceeding the highest projection compiled by Bloomberg and the previously estimated 2.7 percent gain.
Yields on local-currency bonds due in 2024 rose one basis point, or 0.01 percentage point, 5.53 percent, according to data compiled by Bloomberg. The price fell 0.09 centavo to 139.15 centavos per peso.