Mexico Peso Heads to Weekly Gain on Growing Economic Confidence
Mexico’s peso, Latin America’s best- performing major currency this year, headed for a second weekly gain as economic reports fueled confidence in faster expansion.
The peso was headed for a weekly rally of 0.8 percent at 9:15 a.m. in Mexico City and was up 1.9 percent this month, the most among 25 emerging-market currencies tracked by Bloomberg after Romania’s leu. The peso slid 0.3 percent to 12.6424 today.
“We saw favorable data in Mexico,” said Rafael Camarena, an economist at Grupo Financiero Santander Mexico SAB. “Seeing good performance from the Mexican economy” is fueling the rally.
Mexico’s economy expanded 4.33 percent in October from a year earlier, the national statistics agency said yesterday, above the 3.85 percent median projection of 16 economists surveyed by Bloomberg. The agency also said on Jan. 9 that the pace of annual price increases in Mexico slowed to 3.57 percent in December, below the 4 percent upper end of the central bank’s target range for the first time since May.
The peso is also being helped by the outlook for the country’s exports to the U.S., the destination of 80 percent of goods and services that the Latin American country sends abroad, according to Camarena.
The U.S. Commerce Department said today that the U.S.’s trade deficit unexpectedly widened in November as demand for foreign automobiles rebounded. Cars and auto parts represent Mexico’s largest export group.
The yield on Mexico’s fixed-rated peso bonds due in 2024 was little changed at 5.47 percent today, according to data compiled by Bloomberg.
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