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MXN/USD Mexican Peso Close To Six-Week High, Krona Slides

Published: 10 Dec at 12 PM Tags: Euro, Dollar, Pound Sterling, America, Eurozone, USA, Italy, Mexico, Sweden,

Although the ‘Greenback’ was supported against higher-risk peers as a prominent Fed official added weight to the case for the Federal Reserve tapering stimulus before the close of the year the emerging-market Peso rallied in response to political developments.

Mexico’s currency rose to a six-week high of 12.8768 against its US counterpart after the prospect of a more open national energy industry was supported by a joint bill compiled by representatives from both the ruling Institutional Revolutionary Party and the opposing National Action Party.

The plan offers more freedom for the country’s private oil producers and would sanction output-sharing licences. There are hopes that domestic growth will increase by 1 percentage point by 2018 if the energy sector is overhauled.

The Peso continued to trade higher against the US Dollar as Mexico’s inflation rate climbed to 3.62 last month, the first advance for seven months and slightly higher than the 3.60 estimated.

According to local trader Ramon Cordova; ‘It’s positive for the Peso. It’s a kind of euphoria because the economy has been flat in the past year.’

The Peso is currently trading against the US Dollar in the region of 12.8232

In other currency news Sweden’s Krona softened against the Euro for a fourth day and declined against both the Pound and US Dollar as Swedish industrial production tumbled by 1.7 per cent in October, month-on-month.

Economists had envisaged an output gain of 0.9 per cent.

A 4.9 per cent drop in manufacturing production was largely responsible for the downturn.

Declines against the Euro were acerbated as Italian growth data delivered a positive surprise.

As London-based Neil Jones observed; ‘The market was positioned for a weaker Euro in expectation of negative rates and what has changed is that we saw a strong implication that this is not necessarily going to be the case. There’s been a buying back of the Euro by global investors. Meanwhile, you’ve got Eurozone economic data looking ok as well’.

The Krona is currently trading against the Euro in the region of 8.9928

As of Tuesday, 10th December 2013, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP EUR exchange rate was 1.1956, GBP USD exchange rate was 1.6457, and GBP MXN exchange rate was 21.1492.
Dominic Lee About Author: (474 Posts)With over ten years experience as an economist – including four years spent as a chief economist with a major currency broker – Dominic has acquired a wealth of knowledge which he uses to forecast market movements. Dominic now works as an independent business advisor and writes for several financial publications.

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