Mexico’s ‘Super Peso’ Defies Gloom, Tests High as US Economy Gains Steam
- Break of key 16.70 level may herald further gains ahead
- JPMorgan says peso has entered new era of lower volatility
Mexican peso banknotes.
Photographer: Cesar Rodriguez/BloombergForeign-exchange traders are tuning out calls that the Mexican peso is overvalued, leaving the currency poised to test whether it can push past this year’s high as the surprising resilience of the US economy eases concerns about a recession.
The peso firmed as much as 0.8% to 16.7037 per dollar on Thursday, initially leading gains among major currencies, as surprisingly strong US economic growth data added to optimism stoked by Fed Chair Jerome Powell’s comment Wednesday that his staff had abandoned their forecast for a US recession. The currency later lost those gains to be little changed after failing to break below the 16.70 level amid a broad move higher in the US dollar, which was fueled by a jump in Treasury yields.