Mexico Peso Volatility Declines to Five-Year Low After U.S. Data

A measure of the Mexican peso’s fluctuations between gains and losses fell to the lowest level since September 2008 as a U.S. report indicated that the Latin American nation’s biggest export market is recovering.

Three-month historical volatility declined for a 32nd straight day today, dropping to 6.54 percent, according to data compiled by Bloomberg. The stretch of decreases is the longest since January 2012. The currency advanced 0.1 percent to 12.8563 per dollar at 4 p.m. in Mexico City.

The peso advanced after the U.S. Commerce Department reported that bookings for durable goods unexpectedly rose 0.8 percent in April after a 3.6 percent gain in the prior month that was stronger than previously reported. The median forecast of economists surveyed by Bloomberg was for a 0.7 percent drop. The U.S. is the destination for about 80 percent of Mexico’s exports.

“Durable orders were very strong and support the view that the economy’s rebound should be supported by the U.S.,” Eduardo Suarez, a Latin America foreign-exchange strategist at Bank of Nova Scotia, said in an e-mailed response to questions. The report was “consistent with yesterday’s trade data.”

Mexico reported yesterday its third trade surplus in a row in April, the longest streak in almost two years, as manufacturing exports surged, signaling the economy is recovering from this year’s slow start.

Yields on peso bonds maturing in 2024 fell one basis point, or 0.01 percentage point, to 5.9 percent today as the price rose 0.02 centavo to 132.09 centavos per peso, according to data compiled by Bloomberg.

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