The Mexican peso ended its three-day run of gains as traders anxiously waited for an inflation report for the first quarter that will be released on Wednesday.
The peso plunged 0.3 percent to 12.9440 a US dollar in mid-morning trading in Mexico City. Yields on peso-denominated bonds that mature in 2024 rose 0.05 percentage points, or five basis points, to 5.94 percent. The securities’ prices declined 0.42 centavo to 131.84 centavos for each peso.
“The market is waiting to see if policy makers come out as dovish, to see if they’re happy with inflation, and from there the peso may regain its positive momentum,” Eduardo Rodriguez, a Guadalajara-based currency strategist at Casa de Bolsa Finamex, told Bloomberg. “For now, we’re in line with the international environment.”
The peso also fell after Thailand announced a martial law, reducing investor appetite for emerging-economy holdings. Mexico’s central bank inflation report is expected to reveal the monetary policy. The central bank retained the benchmark lending rate at 3.5 percent, a record low, last month in order to shore up the second-largest economy in Latin America. This was the fourth straight meeting to result in the retention of the rate.
The Standard & Poor’s 500 Index fell 0.4 percent, while the MSCI Emerging Markets Index was 0.3 percent weaker after ending yesterday at its strongest point since last October.
Another major Latin American currency Brazil’s real fell as investors avoided emerging-nation currencies. The real fell 0.4 percent to 2.2160 a US dollar at the close of trading in Sao Paulo. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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