Mexican Peso Leads Latin America Gains as Declines Seen OverdoneBy
Currency ends a 5-day losing streak in which it fell 2.7%
Brazilian real, Peruvian sol and Chilean peso also strengthen
The Mexican peso led a rally in Latin American currencies on wagers that losses in recent days were overdone.
The four best-performing emerging-market currencies Wednesday were all from Latin America. Mexico’s currency added 0.5 percent, Brazil’s real and Peru’s sol each gained 0.3 percent and Chile’s peso strengthened 0.2 percent as of 3:44 p.m. in New York. All four had weakened Tuesday, with the Mexican peso leading declines after S&P Global Ratings warned that it could cut the country’s sovereign credit rating within the next two years.
"Currencies in the region today decided to take a breather from the recent losses, even as commodity prices were down," said Mario Castro, a currency strategist at Nomura Securities International Inc. in New York.
The Mexican peso has been the second-worst performer in emerging markets this year with a 6.9 percent loss, trailing only the Argentine peso. The Mexican peso fell 2.7 percent in the five days through Tuesday.
Mexico’s currency has recovered from a record low of 19.181 per dollar on June 27 amid signs that support is falling for Republican presidential candidate Donald Trump, who has pledged to revise the North American Free Trade Agreement with Mexico and limit remittances to the country, Castro said.
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