| | |  Business News | October 2008 
Mexico Peso, Stocks Pounded by US Recession Fears
 Michael O'Boyle - Reuters
go to original
Mexico City – Mexico's peso weakened sharply Wednesday after a new batch of U.S. economic data reinforced views the United States, Mexico's top trading partner, is facing a recession despite efforts to rescue its banks.
The peso lost 1.88 percent at the central bank's final 1:30 p.m. local time (1830 GMT) reference to 12.74 per dollar.
The central bank earlier sold $400 million at a weighted average of 12.78 pesos per dollar to help prop up the currency.
The benchmark IPC stock index shed 4.8 percent to trade at 21,173.62.
U.S. Federal Reserve Chairman Ben Bernanke said Wednesday the worst financial crisis since the 1930s posed a ”significant threat” to the already weakening U.S. economy.
Bernanke's comments reinforced investors' concerns that recent moves to rescue troubled U.S. banks may not be enough to avert a recession in the United States, the destination for around 80 percent of Mexican exports.
Earlier Wednesday, U.S. retailers posted their biggest monthly sales decline in more than three years in September, while a gauge of New York manufacturing fell in October to the lowest since its inception in 2001.
In the equities market, shares of America Movil, Latin America's biggest cell phone operator, lost 3.92 percent to 21.83 pesos, while its shares listed on the New York Stock Exchange shed 5.1 percent to $34.62.
Shares of Cemex, the top U.S. cement supplier, fell 12.01 percent to 9.89 pesos, while its NYSE-listed stock gave up 12.2 percent to $7.88.
On Tuesday, Standard & Poor's downgraded its rating on Cemex's long-term corporate debt to BBB- from BBB.
Cemex is expected to report a 54 percent drop in third-quarter net profit later on Wednesday, hurt by a weak peso and slumping construction in its chief markets, according to a Reuters survey of analysts.
(Editing by Jan Paschal) |
|
| |
Vallarta Weddings
Tell a Friend
Site Map
Print this Page
Email Us