Feb. 4 (Bloomberg) -- Mexico’s peso rose from an 18-month low on speculation the global economic recovery will weather signs of a U.S. manufacturing slowdown. Bank of America Corp. said buy the currency.
The peso appreciated 1.6 percent to 13.3226 per U.S. dollar at 4 p.m. in Mexico City, the biggest advance since Sept. 18, according to data compiled by Bloomberg. The currency fell 1.3 percent yesterday to its weakest level since July 2012 as a report from the Tempe, Arizona-based Institute for Supply Management showed that manufacturing expanded at the weakest pace in eight months in the U.S., the Latin American nation’s biggest trading partner.
“Growth is going to recover in a significant way,” Rafael Camarena, an economist at Grupo Financiero Santander Mexico SAB in Mexico City, said in a phone interview. “Yesterday, it was about the U.S. Today, it’s the global environment that’s letting the peso recover.”
Investors should buy Mexican pesos as growth in Latin America’s second-biggest economy “will recover strongly” this year, Carlos Capistran, the chief Mexico economist at Bank of America Corp., wrote in a note to clients. Constitutional changes to increase private investment in Mexico’s energy sector will boost the country’s potential growth to 4 percent annually from 3 percent currently, according to Capistran.
Mexico’s economy will expand 3.42 percent this year after projected 1.28 percent growth in 2013, according to the median estimate in a survey of analysts by Bloomberg.
Yields on benchmark Mexican peso bonds maturing in 2024 were little changed at 6.69 percent today, according to data compiled by Bloomberg.
U.S. factory orders dropped 1.5 percent in December, the Commerce Department reported today. Economists were forecasting a decline of 1.8 percent, according to the median estimate in a survey by Bloomberg.
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