Mexico's peso firmed to a 6-week high on Friday after US employers cut a smaller than expected 36,000 jobs in February, supporting hopes of economic recovery in the United States, Mexico's top trading partner. The peso firmed 0.36 percent to 12.665 per US dollar, paring back slightly after jumping to its strongest since January 20 after the release of the US data.
A government report showed US employers cut a smaller than expected 36,000 jobs in February, leaving the unemployment rate unchanged at 9.7 percent. "There were expectations that the number could be much worse than expected because of the weather. So, its the same idea that a US recovery is good for Mexico and we see Mexico strengthening," said Francisco Diez, director of emerging markets trading at RBC Capital Markets in New York.
Mexico is counting on an improving employment picture in the United States to fuel demand for its exports following a crash in late 2008. Around 80 percent of Mexican exports are sent to the United States. Mexico's peso has gained more than 4 percent since early February, boosted by signs of a more robust rebound in exports than many had been expecting.
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