Mexico Peso Slips as Retail Sales Decline Stokes Growth ConcernBen Bain and Nacha Cattan
Mexico’s peso fell the most in a week as a surprise drop in retail sales added to concern that a recovery in Latin America’s second-largest economy is faltering.
The currency slipped 0.3 percent to 13.0931 per dollar at 11 a.m. in Mexico City. A close at that level would be the steepest one-day drop since April 15. Most other major currencies also declined. The yield on government peso-denominated bonds maturing in 2024 fell three basis points, or 0.03 percentage point, to 6.22 percent today. The price rose 0.31 centavo to 129.341 centavos per peso.
The national statistics agency said today that February retail sales unexpectedly fell 1.7 percent from a year earlier, below all 19 estimates in a Bloomberg survey and lower than the median forecast for a 0.4 percent increase. The release added to data this year supporting “the persistent dullness of Mexico’s economy,” Barclays Plc wrote in a note to clients.
“Domestic consumption is weak and therefore does not suggest recovery is taking hold,” Alejandro Urbina, a money manager at Chicago-based Silva Capital Management LLC, which oversees $800 million including Mexico debt, said in an e-mailed response to questions. “It is not supportive of the peso.”
Mexico’s government has projected that economic growth will accelerate to 3.9 percent this year from 1.1 percent in 2013.