Mexico's peso reached the highest level in two years after a report showed an unexpected increase in U.S. retail sales, underpinning bets that demand for exports from Mexico's biggest trading partner will stay strong.
The peso, the biggest gainer among the six most-traded currencies in Latin America, was also
buoyed by speculation further reductions in U.S. interest rates will make local fixed- income assets more attractive to foreign investors.
Speculation that exports ``will sustain currency flows detonated gains in the peso,'' said Alejandro Martinez, a fixed- income analyst in Mexico City at HSBC Mexico SA. ``The increase in the yield differential also helps maintain a strong peso.''
Importance: It is good that the peso is rising in value, but if it's all based on or mostly based on what the U.S. economy is doing don't expect for it to last.
Grade this post.
No comments:
Post a Comment