Healthy job market news in the nation hosting the globe's biggest economy boosted the value of Latin America's most traded currency on Friday, published reports indicate.
Mexican stocks also advanced at a steady clip following the U.S. Department of Labor indicating nonfarm payrolls gained nearly twice as much as anticipated in January, according to Dow Jones Newswires. Market expectations indicated the increase would be 125,000; the increase actually was 243,000, the federal department's report stated, as the unemployment rate in the top trade partner to Mexico dropped from 8.5 percent to 8.3 percent.
The jobless rate in the U.S. has reached its lowest rate in three years.
In early trading on
foreign exchange markets on Friday, the Mexican peso continued its upward drive. The monetary unit has gained nearly 10 percent against the U.S. dollar thus far this year.
Also benefiting the Mexican peso is indications of higher levels of confidence among consumers in the Latin American nation with an economy that only trails that of Brazil for size in the region. Economic data released on Friday stated Mexican consumers are presently more comfortable making larger purchases and with their own prospects projected for one year from now as compared to how Mexican consumers felt last month and this past December, the publication reports.
Bloomberg reports the value of the currency advanced to its highest rate in 120 days against the U.S. dollar on Friday following the U.S. Labor Department's report. The peso is sensitive to financial and economic developments in the U.S. due to the commerce and trade the nations share with one-another.
Thus the optimism for prospects of growth in the U.S. proved to be beneficial to the monetary unit.
Bloomberg reports the peso is the strongest performing currency of the major monetary units in Latin America that the news service follows.
Economist Rafael Camarena with Banco Santander in Mexico City told the news service that uplifting news from the U.S. is dwarfing worries and preoccupations about the damaging tendencies caused by the sovereign debt crisis tearing through euro zone banks, markets and public finance systems.
"The U.S. data keeps supporting the outlook for economic growth," Camarena told the news service, noting an increase in demand for emerging-market assets such as the peso. "That's definitely helping the peso."
The destination of four-fifths of exports from Mexico is the U.S., underscoring the importance of the U.S. to the life and times of the economy of Mexico.
Mexican government bonds set for maturation in 2024 gained eight basis points to 6.25 percent, Bloomberg data indicates.
The final quarter of last year saw the economy of Mexico widen 3.7 percent as compared with the fourth quarter of the year prior, according to the Finance Ministry of Mexico, as cited by Dow Jones Newswires.
Despite the increase, the figure remains lower than the 4.5 percent notated during the third quarter, which the news source attributes to damages caused to exports from Mexico by the sovereign debt crisis.
The ministry noted the nation's economy expanded as much as 4 percent in all of last year, which is lower than the 5.4 percent from the year prior. Projections for the Mexican economy's performance this year are to expand by 3.5 percent, which would represent another indication of the reduced pace.
Domestic demand in Mexico remained strong during the final quarter of last year in Mexico, which did its part to counter the reduced pace of exports to the U.S. because of the lowered rate of industrial activity in the U.S. during that time period.
Market volatility and debilitated confidence among consumers and businesses were consequences of external concerns, such as the debt crisis in the euro zone, according to the ministry.
