Mexico Peso Posts Weekly Decline Amid Global Economic ConcernBen Bain
Mexico’s peso posted its first weekly decline in February on concern that turmoil overseas will stall the global economic recovery.
The currency fell 0.2 percent this week to 13.2648 per U.S. dollar. It appreciated 0.1 percent today. The Bloomberg JPMorgan Latin American currency index climbed 0.4 percent.
The peso’s gains were limited today after a report showed Mexico’s economic expansion slowed in the fourth quarter, according to Rafael Camarena, an economist at Grupo Financiero Santander Mexico SAB in Mexico City. Risks of prolonged market turmoil in emerging markets and of deflation in the euro area threaten the world’s improved economic prospects, the International Monetary Fund said this week in a report.
“This week was very focused on the expectations for recovery and in the end the outlook affected the peso,” Camarena said in a phone interview. “The data in Mexico is also generating doubts about the expected growth.”
A government report today showed that Mexico’s economy grew 0.7 percent in the fourth quarter from a year earlier, less than the 1 percent expansion forecast by economists surveyed by Bloomberg. The Finance Ministry cut its growth estimate last year four times to its lowest since the 2009 recession after exports to the U.S. dropped and the government reduced public spending.
Yields on Mexican peso bonds due in 2024 declined five basis points, or 0.05 percentage point, to 6.37 percent, according to data compiled by Bloomberg. For the week, yields were little changed.