Commodity-Exporter Currencies Rally as Crude Oil Extends Rebound

  • Mexican peso surges on surprise interest-rate increase
  • South African rand, Brazilian real jump about 2 percent

The currencies of commodity-exporting nations rallied, propelled by a surge in crude-oil prices.

Mexico’s peso jumped almost 3 percent, while the South African rand and Brazilian real climbed about 2 percent alongside rising raw-materials prices. Mexico unexpectedly raised benchmark interest rates and unleashed a series of surprise measures in an attempt to lift the currency from record lows.

"Risk assets and commodity-related assets are going to continue to be driven very closely by what’s happening in crude oil," said Omer Esiner, chief market analyst at currency brokerage Commonwealth Foreign Exchange Inc. in Washington. "We had a nice little bounce in oil overnight," which is also driving equities higher, he said.

The peso climbed as much as 4.9 percent, touching the biggest gain since 2008, to 17.9622 per dollar, after reaching a record low last week. It was 2.7 percent higher as of 5 p.m. in New York. The rand gained as much as 2.2 percent, the largest advance since December. The real rose 1.9 percent.

Oil futures added 8.2 percent to $31.43 a barrel in New York.

"This is a little bit of a risk-on trade" that may easily dissipate given the risk aversion that’s beset markets this year, said G. Scott Clemons, chief investment strategist at Brown Brothers Harriman & Co. "Volatility is probably here to stay."

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