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Mexico's Peso Climbs Most in One Month on Banxico Hedge Plan

  • First foreign-exchange hedge auction to take place March 6
  • Settled in local currency, hedge isn’t drain on reserves
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Mexico’s peso rallied the most in a month as the central bank is preparing to auction as much as $20 billion in foreign-exchange hedges for the first time to bolster the currency without draining international reserves.

The peso climbed 2 percent to 19.9740 per dollar at 3:40 p.m. in New York, erasing losses, as the intervention is equivalent to selling dollars in futures markets to expand hedges being offered to companies. The currency broke above the average price of the past 100 days, signalling more gains to technical traders. The first Banxico auction will take place on March 6 for up to $1 billion, the country’s currency exchange commission said on its website.