Mexico Peso Falls From 18-Month High as Cyprus Hurts GDP Outlook

Mexico’s peso fell amid concern that Cyprus’s financial turmoil will rekindle Europe’s debt crisis and cut into global economic growth.

The peso fell 0.3 percent to 12.3819 per U.S. dollar at 7:27 a.m. in Mexico City. The peso initially rallied, touching earlier today 12.3226 per dollar, the strongest intraday level since September 2011. The peso has advanced 3.8 percent this year, the most among 16 major currencies tracked by Bloomberg, after rallying 8.4 percent in 2012.

Cyprus’s President, Nicos Anastasiades, met advisers to draft a new plan to avoid a financial collapse after lawmakers rejected the euro area’s proposed levy on bank deposits. Losses in the peso were limited as a government report showed applications for jobless benefits in the U.S., the biggest buyer of Mexican exports, totaled 336,000 in the week ended March 16, below the 340,000 mediate estimate in a Bloomberg survey.

“Surely it’s the noise from Europe,” Rafael Camarena, an economist at Grupo Financiero Santander Mexico SAB, said in a telephone interview. “The jobless claims were favorable in the U.S.”

Yields on peso bonds due in 2024 fell two basis points, or 0.02 percentage point, to 4.95 percent, according to data compiled by Bloomberg.

Mexican Finance Minister Luis Videgaray and Economy Minister Ildefonso Guajardo are scheduled to speak at the Bloomberg Mexico Economic Summit starting at 9 a.m. local time.

Before it's here, it's on the Bloomberg Terminal.