Mexico’s peso fell for a third straight day as signs of an improving U.S. labor market fueled speculation that the Federal Reserve will cut stimulus that’s helped drive demand for the Latin American country’s debt.
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 peso fell this quarter as President Enrique Pena Nieto’s push to bolster growth through legal reforms failed to overshadow concern about the U.S. economy and the Federal Reserve’s monetary stimulus.
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.