In more great news for Mexico’s booming economy,Bloomberg reported in early January that Mexico’s peso rose to a nine-month high,as growth and speculation increased more quickly than anticipated. This came following news that the government will pass legislation to boost the country’s gross domestic product (GDP),which increased investor confidence in Mexico real estate and Latin America’s second largest economy as a whole. In fact,the peso advanced .6 percent,hitting 12.6526 per U.S. dollar,which is the highest intraday level since March of 2012.
“Mexico’s peso increased the most among major Latin American currencies after the government said the economy expanded in October from a year earlier at the fastest pace since July,” writes Bloomberg. “The political outlook remains ‘supportive’ for legislative changes that President Enrique Pena Nieto is trying to pass to boost economic growth,Bank of Nova Scotia (BNS) wrote today in a note to clients.”
A currency trader at Banco Base SA in San Pedro Garcia,Mexico,told Bloomberg that “big players” have been getting into the peso recently,thanks to economic data that points to stronger-than-forecast growth,which has provided an additional push. In addition,Bloomberg reported that Mexico’s economy expanded 4.33 percent last October,compared to the same period in 2011,marking the fastest pace of growth since July.
Also of note,according to a Bloomberg survey of 16 analysts,the increase in Mexico’s global economic indicator,which is a substitute for the nation’s GDP,is projected to hit at least 3.85 percent,according to a median estimate. The number of wagers by hedge funds and other large speculators for gain in the peso also outnumbered those for a decrease in the futures market by nearly 142,000 in early January,which is up from close to 87,000 last November.