The Mexican peso’s implied volatility dropped from a three-week high as investors speculated over when the U.S. Federal Reserve will slow bond purchases that have fueled demand for the Latin American country’s local-currency debt.
Three-month implied volatility on options for the peso, which reflect traders’ projections for price fluctuations, fell to 11.5 percent at 10:16 a.m. in Mexico City, according to data compiled by Bloomberg. The gauge of currency swings climbed to 12.02 percent on Nov. 1, the highest since Oct. 11.
The peso appreciated 0.6 percent to 12.9787 per U.S. dollar today.
Expectations for price swings in the peso are declining as investors are unsure of when the Fed will reduce the pace of its $85 billion in monthly asset purchases, Eduardo Rodriguez, a trader at Casa de Bolsa Finamex SAB, said in a telephone interview from Guadalajara, Mexico.
Investors “are waiting for a stronger piece of news that’s more conclusive.” Dallas Fed President Richard Fisher said in an interview in Sydney that he wouldn’t rule out backing a tapering of asset purchases by March depending on economic conditions.
The Fed said last week that it needs to see more evidence that the world’s largest economy will sustain its recovery.
Yields on Mexico’s peso bonds maturing in 2024 declined nine basis points, or 0.09 percentage point, to 5.96 percent, according to data compiled by Bloomberg. The drop is the biggest on a closing basis since Oct. 17.
bloomberg.com
Three-month implied volatility on options for the peso, which reflect traders’ projections for price fluctuations, fell to 11.5 percent at 10:16 a.m. in Mexico City, according to data compiled by Bloomberg. The gauge of currency swings climbed to 12.02 percent on Nov. 1, the highest since Oct. 11.
The peso appreciated 0.6 percent to 12.9787 per U.S. dollar today.
Expectations for price swings in the peso are declining as investors are unsure of when the Fed will reduce the pace of its $85 billion in monthly asset purchases, Eduardo Rodriguez, a trader at Casa de Bolsa Finamex SAB, said in a telephone interview from Guadalajara, Mexico.
Investors “are waiting for a stronger piece of news that’s more conclusive.” Dallas Fed President Richard Fisher said in an interview in Sydney that he wouldn’t rule out backing a tapering of asset purchases by March depending on economic conditions.
The Fed said last week that it needs to see more evidence that the world’s largest economy will sustain its recovery.
Yields on Mexico’s peso bonds maturing in 2024 declined nine basis points, or 0.09 percentage point, to 5.96 percent, according to data compiled by Bloomberg. The drop is the biggest on a closing basis since Oct. 17.
bloomberg.com
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