Mexico’s peso slumped the most in two weeks as reports on U.S. company hiring and service industries trailed economists’ estimates, damping the Latin American country’s export outlook.
The peso depreciated 0.6 percent to 12.3442 per U.S. dollar at 3 p.m. in Mexico City, paring gains this year to 4.1 percent, still the biggest rally against the greenback among the world’s 16 most-traded currencies.
The currency’s move is “pure reaction” to the data, Roberto Galvan, a currency trader at Intercam Casa de Bolsa SA in Mexico City, said in a telephone interview. “Faced with an economic slowdown in our principal trading partner, the medium-and long-term impact on the Mexican economy tends also to be a slowdown.”
The peso’s advance this year, including a 0.7 percent jump yesterday, has been partly fueled by stronger growth in the U.S., the destination for about 80 percent of Mexico’s exports.
The currency fell today as figures from ADP Research Institute showed an increase of 158,000 in employment by U.S. companies last month, the smallest since October. The peso dropped further after a separate report showed that service industries in the U.S. expanded in March at the slowest pace in seven months.
The Institute for Supply Management’s non-manufacturing index declined to 54.4 from a one-year high of 56 in February. The median forecast in a Bloomberg survey called for a drop to 55.5. A reading above 50 indicates expansion.
Yields on peso-denominated bonds due in 2024 rose one basis point to 5.01 percent, according to data compiled by Bloomberg. The price dropped 0.11 centavo to 144.12 centavos per peso.