MEXICO CITY: Mexico's peso rose on Friday after US employment data put pressure on the US dollar, and the peso finished with its strongest weekly gain almost seven years after a decisive result in the Mexican presidential election on July 1.
Most Latin American currencies strengthened on Friday, most of all the Brazilian real, after data showed US wage growth was less than forecast in June, suggesting the US Federal Reserve could take its time before raising interest rates.
The US economy created more jobs than expected last month and data from April and May were revised up, but the unemployment rate rose and growth of average hourly earnings slowed, suggesting a limited inflationary impact.
The recent selloff in emerging market currencies slowed as a result, after suffering under the threat of a full-blown trade war between the United States and China, as well as from rising US bond yields and an outlook for a wider US fiscal deficit.
The Mexican peso advanced almost 0.8 percent, for an increase of 4.4 percent in the past week and that was the peso's strongest weekly gain since the one ending Oct. 28, 2011.
The currency had a rollercoaster week after leftist Andres Manuel Lopez Obrador won Sunday's presidential election. Lopez Obrador's nationalist leanings initially spooked investors, but the peso bounced back after he and his advisors sought to reassure investors he would stick to fiscal discipline.
"Even if the market seems to be calm about the first signals from the next government, looking ahead, the opinion of financial markets ... could vary depending on how prudently economic policy, and particularly fiscal policy, is conducted," Banco Base said in a note to clients.
The Brazilian real seesawed and closed up by 1.67 percent.
Comments
Comments are closed.