Mexico’s peso fell for a sixth day in its longest losing streak since November as speculation the Federal Reserve will consider scaling back its record program of asset purchases reduced demand for emerging-market assets.
The peso depreciated 0.3 percent to 12.2368 per U.S. dollar at 10:10 a.m. in Mexico City, paring its rally this year to 5.1 percent, still the biggest gain among 16 major currencies tracked by Bloomberg.
The peso dropped along with most emerging-market currencies after Philadelphia Fed President Charles Plosser said he favors phasing out U.S. central bank’s asset purchases, known as quantitative easing.
The Fed’s $85 billion in monthly bond purchases to hold down borrowing costs has fueled demand for peso-denominated assets.
“People are thinking about the Fed potentially tapering,” Eduardo Suarez, a Latin America foreign-exchange strategist at Bank of Nova Scotia, said in an e-mailed response to questions. “Slowing growth should be risk-on.”
The peso pared losses as U.S. reports showed more people than forecast filed applications for first-time jobless benefits last week and housing starts fell in April, encouraging some traders to speculate that the Fed will maintain asset purchases.
The yield on peso bonds due in 2024 declined seven basis points, or 0.07 percentage point, to 4.63 percent, according to data compiled by Bloomberg. The price rose 0.74 centavo to 148.17 centavos per peso.
bloomberg.com
The peso depreciated 0.3 percent to 12.2368 per U.S. dollar at 10:10 a.m. in Mexico City, paring its rally this year to 5.1 percent, still the biggest gain among 16 major currencies tracked by Bloomberg.
The peso dropped along with most emerging-market currencies after Philadelphia Fed President Charles Plosser said he favors phasing out U.S. central bank’s asset purchases, known as quantitative easing.
The Fed’s $85 billion in monthly bond purchases to hold down borrowing costs has fueled demand for peso-denominated assets.
“People are thinking about the Fed potentially tapering,” Eduardo Suarez, a Latin America foreign-exchange strategist at Bank of Nova Scotia, said in an e-mailed response to questions. “Slowing growth should be risk-on.”
The peso pared losses as U.S. reports showed more people than forecast filed applications for first-time jobless benefits last week and housing starts fell in April, encouraging some traders to speculate that the Fed will maintain asset purchases.
The yield on peso bonds due in 2024 declined seven basis points, or 0.07 percentage point, to 4.63 percent, according to data compiled by Bloomberg. The price rose 0.74 centavo to 148.17 centavos per peso.
bloomberg.com
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