Peso Surges For the 3rd Straight Day as Investors are Hopeful of Reforms in Mexico

US economy has always impacted Mexican economy and even this time, Peso, the major currency of this neighboring country of US has been helped. Peso has risen for the 3rd consecutive day as there are speculations that the US politicians will soon come into an agreement on the budget deal. Apart from that, the Mexican President, Enrique Pena Nieto has announced some policies recently that are expected to give the economic growth of Mexico a good boost.

Peso has increased by 0.2% against USD and is currently priced at 12.9049 per USD. Incidentally, Peso has seen a total rise of 8% in 2012. This marks the biggest gain for any currency if compared among the most traded counterparts of USD.

Pena Nieto has already signaled about going with policies that will help Mexico to boost the growth. He has even signed an accord with 3 of the biggest political party leaders after taking oath as the President. The accord was signed to allow competitors of Petroleos Mexicanos to run their businesses in the country. Incidentally, since 1938 when the then President Lazaro Cardenas nationalized the country’s oil industry, Petroleos Mexicanos had enjoyed a monopoly in the country’s exploration, production and refining industry.

Rafael Camarena, the senior economist working for Grupo Financiero Santander Mexico SAB stated that the investors are optimistic about the New Mexican Government and see high chances of political agreements to bring reformations in the country. He added that as US politicians are also leaving no stones unturned to come up with a solution for the so-called fiscal cliff and that has triggered further optimism in Mexico’s major currency. Mexico’s economy, incidentally, relies on US in a big way. US is the biggest export market for Mexico and around 80% of total Mexican exports are done to US, its northern neighbor.

Around 80 members of the US Congress including both Democrats and Republicans have signed a letter to look out for all the possible options so that the political impasse over higher taxes for higher earners can be broken. The Yields on the Mexican bonds due in 2024 were little changed and were at 5.47% today. The price actually saw a decline today and is at 139.90 centavos per Peso, plummeting by 0.04%.