MEXICO: The Mexican peso holds a firm tone Wednesday, buoyed by
overall demand for GEM currencies due to improved risk appetite as well
as by Mexican specific demand. Dollar-peso stands at Mxn12.5050, after
trading in a Mxn12.4760 to Mxn12.5275 range. Earlier, dollar-peso dipped
below the Dec 2009 low of Mxn12.4820 to test levels last seen in Nov
2008, when the pair bottomed near Mxn12.3350. The peso remains
underpinned by talk that the government will soon auction a 30-year
(inflation-linked) syndicated bond (Mxn15-20bn), perhaps as early as
next week. The new auction would come on the heels of a successful
MXn25bn 10-year syndicated bond auction in February. Greg Anderson of
SocGen says the auction “shows Mexico is way past the fiscal jitters of
last year. If risk appetite for GEM continues and the 30-yr auction
takes place, peso gains may “accelerate” toward Mxn12.2000, he says.