Reuters: US Dollar Report: EMERGING MARKETS-Mexico peso rallies on reform optimism, Fitch eyed

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EMERGING MARKETS-Mexico peso rallies on reform optimism, Fitch eyed May 8th 2013, 00:05 Tweet Share this Email Print Related Topics Currencies » Bonds News » Bonds » Markets » Tue May 7, 2013 8:05pm EDT * Deal to restart talks on economic reforms lifts peso * Talk of rating action further supports Mexican currency * Mexican peso up 0.74 pct, Brazil real gains 0.2 pct By Noe Torres MEXICO CITY, May 7 (Reuters) - Mexico's peso firmed sharply on Tuesday after opposition parties said they would resume talks on economic reforms with the government following a spat over local elections. Opposition leaders said they had agreed with President Enrique Pena Nieto's ruling Institutional Revolutionary Party (PRI) on new measures to prevent vote buying in upcoming local elections, allowing work on reforms to continue. Pena Nieto was set to present on Wednesday a financial proposal that was recently derailed by allegations his party was using funds meant for a social program to buy votes. Optimism that Pena Nieto will be able to push major economic reforms through the country's divided Congress has helped the peso gain 7 percent this year. "The market is pricing in that they are looking for ways to push the reforms through in the next congressional session," said Mario Copca, an analyst at CI Banco in Mexico City. Mexican lawmakers went on break this month and both houses are set to resume in September. The Mexican currency gained 0.74 percent to 12.0203 per dollar, leaving the currency near the 20-month high it hit last month. Talk that Fitch Ratings could soon raise its outlook on Mexico's BBB credit rating to positive from stable also supported the peso. A positive outlook would signal that the rating agency is considering upgrading Mexico's credit rating in the next 18 months or so. A spokeswoman for Fitch said the company does not comment on market rumors. A little over two months ago, however, the firm said Mexico's ratings will depend on progress the new administration makes on reforms to boost competitiveness, productivity, growth and fiscal flexibility. A formal review of Mexico's ratings was expected for this month, Fitch's analyst Shelly Shetty told Reuters in an interview in June 2012. In Brazil, the real rose 0.23 percent as traders cited small dollar inflows in an otherwise quiet market. "As net flows have been fairly muted, any inflow or outflow results in exchange rate variations that have been modest in general," said Waldir Kiel, an economist with H.Commcor brokerage in Sao Paulo. Latin American FX prices at 2300 GMT: Currencies daily % YTD % change change Latest Brazil real 2.0068 0.23 1.65 Mexico peso 12.0203 0.74 7.02 Chile peso 470.3000 -0.21 1.79 Colombia peso 1827.4000 0.09 -3.36 Peru sol 2.6140 -0.04 -2.41 Argentina peso 5.2100 -0.05 -5.71 Argentina peso 10.0400 -1.69 -32.47 Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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