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Mexico’s Peso Rises to Strongest in 16 Months on U.S. Recovery
 Ye Xie - Bloomberg
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March 29, 2010
Mexico’s peso rose to the strongest level since November 2008 as signs of an economic recovery in the U.S. boost speculation the Latin American nation’s exports will increase.
The currency gained 0.3 percent to 12.4555 per U.S. dollar at 9:41 a.m. New York time, from 12.4962 on March 26. Earlier it reached 12.4134, the strongest level since Nov. 5, 2008. The peso has gained 5.1 percent this quarter, the best performer among the 16 most-actively traded currencies tracked by Bloomberg.
Consumer spending in the U.S. increased 0.3 percent in February, rising for a fifth consecutive month, the Commerce Department said today. Mexico ships 80 percent of its exports to the U.S.
“The prospect of the U.S. recovery benefited the peso,” said Gerardo Margolis, vice president of emerging markets at TD Securities Inc. in Toronto. “The increase of risk appetite is also supporting the currency.”
Futures traders increased their bets to the highest level since April 2008 that the peso will extend its gain, figures from the Washington-based Commodity Futures Trading Commission showed on March 26.
The difference in the number of wagers by hedge funds and other large speculators on an advance in the peso compared with those on a drop - so-called net longs - was 109,862 on March 23, compared with net longs of 103,254 a week earlier.
The yield on Mexico’s 10 percent peso bond due in 2024 was little changed at 8.03 percent, according to Banco Santander SA. The price of the security was 116.89 centavos per peso.
To contact the reporter on this story: Ye Xie in New York at yxie6(at)bloomberg.net
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