Investors Bet on Fed, Pushing Peso Up
 Bloomberg News
Mexico's currency rose to its strongest since January amid expectations the U.S. Federal Reserve will keep borrowing costs steady when policymakers meet this week, preserving the attractiveness of riskier peso assets.
The Fed's Wednesday meeting comes after Mexico's central bank unexpectedly raised its target by a quarter percentage point last month. The move by Banco de Mexico widened the spread, or yield differential, between the banks' key rates for the first time in two years.
"The surprise rate increase by Mexico's central bank and expectations the Fed won't raise rates have made Mexico more attractive," said Jaime Ascencio, a Mexico City-based economist at Actinver, the country's biggest nonbank investment firm.
In New York trading, the peso rose to 9.2243 cents from 9.1834.
The dollar fell to 10.8409 pesos from 10.8892.
Also Monday, Mexico's bolsa index fell 237.28, or 0.8 percent, to 29,776.57.
Shares of large companies, including Walmex and Fomento Economico Mexicano, or Femsa, have failed to gain as much as their peers this year because of slower-than-expected earnings growth, Alejandro Fuentes Perez of BBVA Bancomer said. |
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