Mexico Peso Rises Most in Three Weeks as Growth Outlook Improves
Mexico’s peso rose after China’s government said it will focus on bolstering growth, fueling confidence in global expansion after the Latin American’s country’s policy makers boosted their economic forecasts.
The peso appreciated the most in May, rising 0.9 percent to 13.6936 per dollar at 4 p.m. in Mexico City, extending its advance this year to 1.8 percent after the worst performance among major Latin American currencies in 2011.
The currency rose today along with commodities after Chinese Premier Wen Jiabao pledged over the weekend to put more emphasis on bolstering growth, adding optimism to a global outlook that has been battered by Europe’s worsening debt crisis. Mexico’s gross domestic product will expand 3.7 percent this year, according to a survey of economists released today by Citigroup Inc.’s Banamex unit. The economy was expected to expand 3.5 percent this year in the previous bi-weekly survey.
“Mexico is doing well, and if there’s commentary from China that it’s going to boost stimulus, that should help take off some pressure from the idea that everything is bad,”Ramon Cordova, a currency trader at Banco Base SA in San Pedro Garza Garcia, Mexico, said in a phone interview.
Gross domestic product in Mexico grew 4.6 percent in the first quarter from a year earlier, the fastest pace in six quarters, the national statistics institute said last week. Central bankers in Mexico, which sends 80 percent of its exports to the U.S., boosted last week their growth estimate for this year to as much as 4.25 percent from no more than 4 percent previously.
U.S. payrolls will rise 188,000 a month on average in 2012, up from a February projection of 170,000, according to the results of a survey by the National Association for Business Economics issued today in Washington.
“If the U.S. economy continues giving us surprises in its capacity to enhance its rate of growth, that certainly would support Mexico,” central bank Governor Agustin Carstens said in an interview May 18. “There is the possibility of seeing higher rates of growth in Mexico if that happens.”
The yield on Mexican local-currency bonds due in 2024 fell one basis point, or 0.01 percentage point, to 6.21 percent, according to data compiled by Bloomberg. The price increased 0.10 centavo to 133.03 centavos per peso.
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