Mexico Peso Declines as U.S. Earnings Crimp Outlook for Exports
Mexico’s peso fell as some U.S. companies missed earnings estimates, dimming the outlook for the Latin American nation’s biggest export market.
The peso retreated 0.5 percent to 12.2714 per U.S. dollar at 11:31 a.m. in Mexico City, paring its rally in 2013 to 4.8 percent, still the biggest among the 16 major dollar counterparts tracked by Bloomberg.
“It’s definitely a healthy profit taking, and it has to do with earnings,” Eduardo Rodriguez, a currency trader at Casa de Bolsa Finamex SAB, said in a telephone interview from Guadalajara, Mexico. “There’s going to be a lot of correlation” between the peso and U.S. stocks.
The Standard & Poor’s 500 Index dropped 0.5 percent today, paring its increase this year to 8.3 percent. The 30-day correlation coefficient between the peso and the S&P 500 Index (SPX) rose today to 0.71, the highest among the greenback’s major counterparts after Canada’s currency. A reading of 1 would signal a move in lockstep.
New York-based Morgan Stanley reported the biggest drop in trading revenue among the largest U.S. banks. EBay Inc. (EBAY), the San Jose, California-based company that operates the largest Internet marketplace, reported first-quarter sales that missed some analysts’ estimates. Mexico sends about 80 percent of its exports to the U.S.
Yields on peso bonds due in 2024 fell four basis points, or 0.04 percentage point, to a record low 4.69 percent today, according to data compiled by Bloomberg. The price rose 0.39 centavo to 147.67 centavos per peso.
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