Mexican Peso Advances Thanks To Remarks of Bill Gross

The major currency of Mexico, Peso registered the biggest increase if all the major Latin American currencies are taken into consideration. Incidentally, Bill Gross, the founder of Pacific Investment Management, the biggest bond fund manager in the world, stated that Mexican Peso is a great currency and that generated high positive sentiment for the same. Apart from that, Gross mentioned that the target lending rate of Mexico has been stable for quite some time and that’s certainly a positive sign for the currency. Incidentally, for the last 32 consecutive meetings, the benchmark borrowing costs have been maintained at the record low 4.5% by the Central Bank of the country.

Mexican Peso posted an increase of 0.6% against USD and is currently at 12.6315 per USD. Only yesterday, the currency registered a decline of 0.8%, marking its biggest drop since 21st December. In 2013, so far, Mexican Peso has surged ahead by 1.8%.

According to Bank of Nova Scotia’s Latin America Foreign Exchange Strategist, Eduardo Suarez, Mexican Peso has been one of the strongest currencies all over the world on the day. Eduardo added that this surprised many investors as only yesterday, it was one of the currencies that were most beaten up.

Benito Berber, the Strategist for the Nomura Holdings Inc., stated that the probability of Peso experiencing a significant decrease in the near future is pretty much less. Berber also predicted that the Central Bank will be reducing the benchmark rate by 0.5 percentage point in the 2nd half of the current year.

Apart from comments made by Bill Gross, Peso was also helped by the good figures of European companies. Numerous companies such as BP Plc., Munich Re etc. posted better figures than their initial earnings estimates and thereby the concern of possible sovereign debt turmoil was eased down. In case of sovereign debt turmoil, the global economic growth would have slowed down further.

Incidentally, only on last week, a buildup of gas resulted into a deadly blast at headquarters of Petroleos Mexicanos. The news was confirmed by Jesus Murillo, the Attorney General on yesterday night. He added that no sign of explosives was discovered at the sight.

The yields on the Peso bonds changed little and it is currently at 5.03%. The price actually experienced a decline of 0.01 centavo and is at 110.97 centavo per Peso.