Mexico’s Peso Biggest Drop in a Year
Mexico’s peso tumbled the most in more than a year, prompting the central bank to sell $200 million to help stabilize the currency.
The peso fell 1.8 percent to 15.4726 per dollar, the biggest drop on a closing basis since August 2013, joining a slide of global counterparts. The Mexican currency is now at its lowest level in six years, approaching the record of 15.5892 reached in March 2009.
A report Friday showing strength in the U.S. labor market bolstered speculation the Federal Reserve is closer to raising interest rates, reducing the appeal of emerging-market assets that typically offer higher yields. The central bank’s dollar sales, held under a program started in December, usually are triggered when the peso falls more than 1.5 percent in one trading session. The last time the bank intervened was Dec. 11.
“I would increase the size of the daily auctions,” Eduardo Suarez, a strategist at Bank of Nova Scotia, said in an e-mail. “This is too broad-based. I don’t think you can stop a move like this.”
Central bank board member Manuel Sanchez said in a speech in Mexico City Friday that weakness in the peso is spurring inflation.
By Isabella Cota