Mexico Peso Falls as European Crisis Erodes Demand for Risk

Mexico’s peso fell for a third day on concern Europe’s debt crisis may squelch global growth.

The currency fell 0.1 percent to 13.5140 per U.S. dollar at 4 p.m. in Mexico City, after rising as much as 0.7 percent in intraday trading. The loss pared this year’s advance to 3.1 percent.

Greek political leaders headed into a fifth day of talks to carve out a government, with the impasse raising the possibility that another election will have to be held as early as next month. Mexico’s peso fell in late trading after JPMorgan Chase & Co. said it had significant losses on synthetic credit securities.

The peso “has become really a proxy for emerging markets for a lot of investors,” Kenneth Lam, a Latin America currency and local rates strategist at Citigroup Inc., said by phone from New York. “A lot of guys right now are probably just trading global risk sentiment” through the currency, he said.

The yield on Mexico’s peso bonds due in 2024 rose three basis points, 0.03 percentage point, 6.29 percent, according to prices compiled by Bloomberg. The price fell 0.32 centavo to 132.15 centavos per peso.