Mexico's Peso Changes Course, Weakens Vs Dollar To MXN14.0690

Mexico's Peso Changes Course, Weakens Vs Dollar To MXN14.0690

MEXICO CITY (Dow Jones)--After a promising start to trading on Monday, Mexico's peso changed course and was weaker against the dollar in afternoon trading.

The currency was quoted in Mexico City at MXN14.0690 to the dollar around 1:30 p.m. EST, after strengthening earlier in the session to MXN13.8850. The currency had closed Friday at MXN14.0225.

A Mexico City currency trader attributed the peso's weakness to a series of fundamental factors, including worsening prospects for economic growth because of the U.S. recession, falling oil prices, and the Bank of Mexico's monetary easing cycle that takes some of the shine off local yields.

For those reasons, "there's a bit of a run on the peso," the trader said.

Local government bonds were also under some selling pressure, pushing yields higher. The yield on 10-year bonds was up 9 basis points to 7.41% and 20-year yields were 6 basis points to 7.72%.

Local stocks remained higher, meanwhile, with the market's IPC index gaining 1.6% to 19,650.22 points, helped by U.S. equity market gains.

-By Anthony Harrup, Dow Jones Newswires; (5255) 5001 5727, [email protected]

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: You can use this link on the day this article is published and the following day.

(END) Dow Jones Newswires

January 26, 2009 13:49 ET (18:49 GMT)

Copyright 2009 Dow Jones & Company, Inc.