Mexico’s peso fell the most in a week after a report that showed China’s economy grew less than forecast added to concern that global expansion is slowing, damping the Latin American country’s export outlook.
The peso weakened 0.5 percent to 12.1394 per dollar at 8:19 a.m. in Mexico City. The drop pared this year’s rally to 5.9 percent, still the biggest gain among the greenback’s 16 most- traded counterparts tracked by Bloomberg.
Mexico’s currency slumped after data showed expansion in China, the world’s second-largest economy, unexpectedly lost momentum in the first quarter as gains in factory output and consumption weakened.
Chinese gross domestic product rose 7.7 percent from a year earlier, compared with an 8 percent median estimate among analysts surveyed by Bloomberg.
The peso extended losses after a separate report showed manufacturing in the New York region expanded less than projected in April.
“Softer data than the market has expected” is driving the peso’s decline, Roberto Torres, the head of peso trading at BNP Paribas SA, said by phone from New York.
“This is pure risk aversion in terms of China and the U.S. number.” Mexico sends about 80 percent of its exports to its northern neighbor.
The Federal Reserve Bank of New York’s general economic index dropped to 3.05 this month from 9.24 in March. Readings exceeding zero signal expansion in New York, northern New Jersey and southern Connecticut.
The median projection of 47 economists surveyed by Bloomberg was 7. Yields on Mexican peso bonds due in 2024 rose two basis points, or 0.02 percentage point, to 4.79 percent today, according to data compiled by Bloomberg. The price fell 0.26 centavo to 146.57 centavos.
bloomberg.com
The peso weakened 0.5 percent to 12.1394 per dollar at 8:19 a.m. in Mexico City. The drop pared this year’s rally to 5.9 percent, still the biggest gain among the greenback’s 16 most- traded counterparts tracked by Bloomberg.
Mexico’s currency slumped after data showed expansion in China, the world’s second-largest economy, unexpectedly lost momentum in the first quarter as gains in factory output and consumption weakened.
Chinese gross domestic product rose 7.7 percent from a year earlier, compared with an 8 percent median estimate among analysts surveyed by Bloomberg.
The peso extended losses after a separate report showed manufacturing in the New York region expanded less than projected in April.
“Softer data than the market has expected” is driving the peso’s decline, Roberto Torres, the head of peso trading at BNP Paribas SA, said by phone from New York.
“This is pure risk aversion in terms of China and the U.S. number.” Mexico sends about 80 percent of its exports to its northern neighbor.
The Federal Reserve Bank of New York’s general economic index dropped to 3.05 this month from 9.24 in March. Readings exceeding zero signal expansion in New York, northern New Jersey and southern Connecticut.
The median projection of 47 economists surveyed by Bloomberg was 7. Yields on Mexican peso bonds due in 2024 rose two basis points, or 0.02 percentage point, to 4.79 percent today, according to data compiled by Bloomberg. The price fell 0.26 centavo to 146.57 centavos.
bloomberg.com
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