Mexico’s Peso Closes Stronger Against US Dollar

The Wall Street Journal, 2/26/12

Mexico’s peso closed stronger against the U.S. dollar Monday as investors were encouraged to buy stocks and other risky assets following positive European data and comments from U.S. Federal Reserve Chairman Ben Bernanke in favor of keeping interest rates low to support job growth.

The peso closed in Mexico City at MXN12.6640 to the dollar, according to Infosel, compared with MXN12.7480 at the close Friday. The improved risk appetite fed into the local stock market, where the benchmark IPC index rose 1.4% to a record high close, beating the previous record in January 2011.

Banorte-Ixe said in a report that it remains neutral on the peso in the near-term, while expecting the currency to gain in the remainder of the year, strengthening as far as MXN12.50 or even MXN12.30 in the third and fourth quarters, helped by the improving U.S. economy.

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