Mexico’s stock market rallied for a fifth straight day to a fresh record intraday high on Wednesday, but its peso currency weakened on concerns over higher U.S. interest rates.
Worries that the U.S. Federal Reserve could increase rates as soon as September after a muted market reaction to Britain’s decision to leave the European Union weighed on the
high-yielding currency.
But many traders would see higher Fed rates as an evidence of strength in the world’s biggest economy, spelling good news for Mexican companies since the country mainly exports to the United States.
“Stock markets are brushing over the (Mexican) peso’s underperformance this year as signs that the U.S. economy is on track to gain momentum,” a trader focused on Latin America said in New York.
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Also supporting demand for riskier assets were advances in U.S. and European stock markets following upbeat corporate results as well as a jump in crude prices.
The Mexican peso fell 0.5 percent to 18.59 pesos to the dollar, taking its year-to-date losses to 7.3
percent.
However, the Mexican benchmark stock index rose 0.4 percent to 47,268,86 points, trimming gains from its high of 47,290.25 points.