Mexico Peso Rises to Two-Month High on U.S. Manufacturing GrowthBen Bain
Mexico’s peso climbed to a two-month high as faster U.S. manufacturing growth improved the economic outlook for the Latin American nation’s biggest trading partner.
The currency rose for a fourth straight day, appreciating 0.1 percent to 13.0510 per U.S. dollar at 5 p.m. in Mexico City, the strongest level on a closing basis since Jan. 10. The peso climbed 1.5 percent in March.
The peso rallied after the Tempe, Arizona-based Institute for Supply Management’s U.S. manufacturing index increased to 53.7 in March from 53.2 in the prior month, indicating that production is picking up in the destination for about 80 percent of Mexican exports. The economy of Mexico will expand 3.9 percent this year and 4.7 percent in 2015 after growing 1.1 percent in 2013, the Finance Ministry reiterated yesterday.
“We see the peso moving much more in line with what’s happening with growth,” Juan Carlos Alderete, a strategist at Grupo Financiero Banorte SAB in Mexico City, said in a telephone interview. “It’s gaining correlation with the positive economic surprises in the U.S. and Mexico.”
The peso dropped 1.4 percent in 2013 as the U.S. Federal Reserve began reducing the size of the monetary stimulus program that was fueling demand for emerging-market assets.
The Finance Ministry said in an e-mailed statement yesterday that it sees the peso averaging 13.1 per dollar this year, weaker than the previous forecast of 12.9.
The price of local government bonds maturing in 2024 dropped 0.02 centavo to 129.62 centavos per peso today. Yields were unchanged at 6.2 percent, according to data compiled by Bloomberg.