Mexico’s peso surged the most in five months after the central bank sold $400 million in reserves Monday in an effort to bolster the currency as it fell to a record.
The peso advanced 1.3 percent to 16.9821 per dollar at 9:57 a.m. in Mexico City, and earlier rose as much as 1.8 percent, the most since March 20. One-month implied volatility on options for the peso, reflecting projections of price fluctuations, declined for the first time in five days.
Most major emerging-market currencies rallied after China cut interest rates for the fifth time since November and lowered the amount of cash banks must set aside. The peso’s decline Monday triggered an extraordinary dollar sale of $200 million by Mexico’s central bank, in addition to the $200 million that Banxico has been selling daily since July 31.
“China’s easing helped ease concerns over global growth, driving a rebound in risk proxies,” said Eduardo Suarez, a currency strategist at Bank of Nova Scotia.
The yield on fixed-rate government peso bonds due in 2024 fell 0.02 percentage point to 6.04 percent.