Mexico Peso Gains as U.S. Home Sales Boost Economic Confidence
Mexico’s peso rose as an improvement in U.S. home sales buoyed optimism that the expansion in the Latin American country’s biggest trade partner is strengthening.
The peso gained 0.1 percent to 12.8907 per U.S. dollar at 4 p.m. in Mexico City, from 12.9041 on Feb. 24. The peso has advanced 8.1 percent this year.
The currency rose after the National Association of Realtors said the index of pending home resales in the U.S. climbed 2 percent in January, more than the 1 percent median forecast in a Bloomberg survey of economists. The association also revised down the decline in December resales to 1.9 percent. Mexico sends about 80 percent of its exports to the U.S.
The U.S. data “came out quite good,” Omar Martin del Campo, head trader at Banco Ve Por Mas SA in Mexico City, said in a telephone interview. “That’s the rebound that we’re seeing.”
Mexico’s economy will expand 3.5 percent this year after growing 3.9 percent in 2011, central bank Governor Agustin Carstens said Feb. 23 at an event in Mexico City. Latin America’s second-biggest economy after Brazil may grow “closer” to 4 percent this year if the U.S. economy continues to improve, Carstens said.
The yield on peso-denominated debt due in 2024 declined seven basis points, or 0.07 percentage point, to 6.47 percent, according to data compiled by Bloomberg. The price rose 0.76 centavo to 130.58 centavos per peso.
To contact the reporter on this story: Ben Bain in New York at firstname.lastname@example.org
To contact the editor responsible for this story: David Papadopoulos at email@example.com