Mexico’s industrial production unexpectedly fell in December from the year earlier for the first time in three years. The peso weakened on speculation the central bank is more likely to reduce borrowing costs.
Mexico’s peso rose the most in a week as speculation that European leaders will make progress in resolving the region’s debt crisis fueled demand for the Latin American country’s higher-yielding assets.
Mexico’s peso bonds rallied, pushing yields down the most in four weeks, and the currency rose as a U.S. agreement pushed a budget battle that damped demand for the Latin American nation’s debt into early next year.
Mexico’s local currency bond yields rose to a one-week high, following U.S. Treasuries, as speculation that the economic outlook for both countries is improving reduced demand from investors seeking a haven.