peso value

Mexico peso tumbles to 3-month low against the dollar

The Mexican peso fell to a three-month low against the dollar on Wednesday, as weak commodity prices and disappointing factory data from China pressured the currency toward levels that earlier this year triggered central bank intervention.

The peso fell as low as 18.6225 per U.S. dollar, the weakest since Feb. 17, when the central bank sold dollars directly to banks and unexpectedly raised its benchmark interest rate to fight off currency speculators.

Prices of crude, a key export and source of revenue for Mexico, fell below $49 per barrel on skepticism that major
producers could agree to curb output.

Early in the day, equity markets around the world fell after data showed China’s factory activity shrank for a 15th straight month in May as new orders fell, raising worries about global growth.

Oil-rich Colombia’s peso weakened more than its peers for a second day, after the central bank said on Friday it would suspend dollar option sales aimed at cushioning the currency’s decline.

The Brazilian real seesawed as traders remained skeptical of the country’s economic outlook even after a
smaller-than-expected economic contraction in the first quarter.

Analysts pointed out the figures were boosted by an increase in government spending, which should fade over the following quarters.

“With fiscal policy set to tighten over the second half of the year, this prop to the economy will go,” Capital Economics analyst Neil Shearing wrote in a report.

Interim President Michel Temer’s government will seek constitutional change to curb increases in public spending.

Brazil’s benchmark Bovespa stock index rose nearly 1 percent and outperformed its peers in the region, supported by a rebound in shares of Banco Bradesco SA.

A day earlier, Banco Bradesco stock fell 5 percent after federal police accused Chief Executive Officer Luiz Carlos
Trabuco and two senior executives of plotting to avoid a 3 billion-reais ($832 million) tax fine.

PVR Property Management