Mexican Peso declines on concern china to crimp global growth

Mexico’s peso fell as China’s decision to raise fuel prices rekindled concern that global growth is slowing and crimped demand for higher-yielding emerging-market assets.

The peso fell 0.5 percent to 12.7042 per U.S. dollar at 7:05 a.m. in Mexico City, from 12.6453 yesterday. It has gained 9.7 percent this year, the second-best performance among the most-traded Latin American currencies tracked by Bloomberg behind the Colombian peso.

China, the world’s largest oil consumer after the U.S., raised gasoline and diesel prices for the second time in less than six weeks, sending most emerging-market currencies lower. BHP Billiton Ltd. said the nation’s steel production is slowing.

“There was some China-related news that I think is driving this move,” Eduardo Suarez, a currency strategist at Scotia Capital Inc., said by phone from Toronto.

China’s steel production is declining as the economy becomes more tightly tied to consumers than large infrastructure projects, Ian Ashby, president of iron ore at BHP, the world’s third-largest exporter, told reporters today in Perth.

The yield on peso-denominated government debt due in 2024 rose three basis points, or 0.03 percentage point, to 6.56 percent. The price fell 0.30 centavo to 129.65 centavos per peso.