Mexican peso pares rise after interior minister killed in crash
Nov. 11 — Mexico’s peso pared its rise after the government said Interior Minister Jose Francisco Blake Mora was killed in a helicopter crash.
The peso gained 0.3 percent to 13.4926 per U.S. dollar at 1:22 p.m. in Mexico City, from 13.5387 yesterday. The currency rose as much as 1.1 percent in intraday trading as Europe’s efforts to tame its debt crisis spurred more demand for higher- yielding assets.
Blake Mora and seven others were killed when their helicopter went down south of Mexico City, Alejandra Sota, a government spokeswoman, said in a televised speech. “At this moment we are evaluating all the possible causes of this very sad incident,” said Sota. The peso pared gains after the news of Blake Mora’s death, according to Omar Martin del Campo, head trader at Banco Ve Por Mas SA in Mexico City.
“It moved a bit,” he said by phone. “Now it’s returning to the levels that we saw in the morning.”
The benchmark IPC index rose 1.4 percent to 37,121.68 after earlier gaining as much as 1.7 percent.
Italy’s Senate approved a budget bill today, paving the way for a new government led by former European Union Competition Commissioner Mario Monti, while Greece will swear in Lucas Papademos to head a unity government. U.S. Treasury Secretary Timothy F. Geithner said yesterday Europe’s plan to deal with its crisis is a “good framework.”
The peso’s gain today “is just a sigh of relief that it looks like Europe has dodged a bullet in terms of political instability both in Greece and in Italy,” Marc Chandler, the New York-based chief currency strategist at Brown Brothers Harriman & Co., said in a telephone interview “Mexico would be one of our favorite currencies to play catch-up.”
Mexican Economy
Mexican policy makers said Nov. 9 in their quarterly inflation report that while the global economic slowdown has caused external shocks, “among emerging markets, Mexico stands out because of the solidness of its economic fundamentals and monetary policies.”
Mexico’s industrial production rose 3.6 percent in September from a year earlier, the national statistics agency said today on its website. Economists had forecast an increase of 3.1 percent, according to the median estimate of 18 analysts surveyed by Bloomberg.
A report from Reuters/University of Michigan released today showed that consumer confidence in the world’s biggest economy increased in November. U.S. jobless claims fell by 10,000 to 390,000 in the week ended Nov. 5, Labor Department figures showed yesterday.
“If good U.S. data keeps coming out it should help” the Mexican peso, Ramon Cordova, a currency trader at Base Internacional Casa de Bolsa in Monterrey, Mexico, said by phone.
The yield on the country’s benchmark peso-denominated bond due in 2024 rose two basis points, or 0.02 percentage point, to 6.45 percent, according to data compiled by Bloomberg. The price of the security fell 0.25 centavo to 131.26 centavos per peso.