Mexican stocks and the bonds closed lower on Friday as international investors sought safe havens to cut the risk of investing in emerging markets. The IPC stock index dipped 0.18 percent to 20,795.82 points, down for a fourth straight session.
In local stock trading, Telefonos de Mexico, Latin America's leading fixed-line telephone operator, lost 1.55 percent to end at 13.33 pesos. Its American Depository Receipt was down 1.71 percent at $24.17. Banorte, Mexico's fifth-largest bank, rose 0.43 percent to 32.58 pesos. Mexico's peso currency weakened 0.23 percent to 11.0165 per dollar.
Concerns about possible US interest rate hikes, which weighed on investors earlier in the week, eased after Cleveland Fed President Sandra Pianalto said on Friday that stability of inflation expectations had been a factor in her support of a pause in the bank's interest rate hikes last month.
But the possibility of a slowdown in US economic growth has also weighed on the market, leading some investors to reduce their exposure to countries like Mexico and Brazil in favour of safer US Treasury bonds.
In the United States, a tepid labour market, falling consumer confidence and clear signs that the housing market is cooling have all suggested that the US economy is slowing down.
Mexico sends around 85 percent of its exports to the United States. Yields on some peso-denominated bonds ticked higher. Mexico's one-month T-bill saw its yield rise 27 basis points to 7.25 percent and the yield at six months went up 5 basis points to 7.38 percent.
Earlier this week, the peso traded near highs not seen since last May before succumbing to profit-taking as foreign investors moved into safe-haven US bonds.
"The peso has managed to find more stable ground around 11.00 after Thursday's early sell-off, and in the wake of the recent position adjustment we would now expect some consolidation around this level into next week's US consumer confidence, retail sales and import price data," HSBC said in a research report.