 |
|
|
 Business News | July 2006 
Mexican Peso Has Biggest Gain Since 2000 as Calderon Takes Lead
 Bloomberg
| | Mexico's President Vicente Fox shows his ink-stained thumb after casting his vote in the general elections at a polling station in "El Pipila" school in Mexico City. Mexico's peso gained against the dollar on the prospect that Felipe Calderon, a former energy minister and member of President Vicente Fox's National Action Party, win the country's presidential election. (AFP/Omar Torres) |
Mexico's currency had its biggest gain in six years as Felipe Calderon, who has pledged to keep government spending and inflation in check, was leading in nearly complete returns of the presidential election. Stocks and bonds also advanced.
The peso soared 1.7 percent as a partial vote count showed Calderon, a member of President Vicente Fox's National Action Party, holds an advantage of more than 1 percentage point over his rival Andres Manuel Lopez Obrador, who had promised to boost social spending.
"There is a bit of a relief rally right now that Calderon will win the election," said Rafael de La Fuente, a senior Latin American economist at BNP Paribas in New York.
The peso rose to 11.1453 to the dollar, its strongest level in five weeks, at 9:50 a.m. New York time. The gain is the biggest since July 3, 2000, the day after Fox won a landslide vote, ending 71 years of rule by the Institutional Revolutionary Party.
Calderon had 36.5 percent of the vote, based on 95.6 percent of ballots counted by the institute as of 9:43 a.m. New York time, leading his rival by 399,760 votes. Lopez Obrador, a former Mexico City mayor and candidate for the opposition Party of the Democratic Revolution, had 35.4 percent. Both candidates last night declared victory in Mexico's closest ever election.
The country's electoral institute said it will only declare a winner after it finishes an official review of the preliminary hand count by the voting stations, a process that will start July 5.
The country's benchmark Bolsa stock market index jumped 3.6 percent. The yield on Mexico's dollar bond due in 2033, one of the country's most actively traded fixed-income securities, fell 6 basis points, or 0.06 percentage point, to 6.92 percent. The bond's price, which moves inversely to the yield, rose 0.75 cent on the dollar to 107 cents, according to JPMorgan Chase & Co.
The prospect of Lopez Obrador, 52, challenging the results may make gains in the peso short-lived, said Alonso Cervera, a senior Latin American economist with Credit Suisse in New York.
Lopez Obrador, 52, told supporters last night he would respect the final results announced by the electoral institute. At the same time, he said the authorities must respect his victory.
"I think that with a low margin of victory, the likelihood Lopez Obrador could contest the lection is not negligible," de La Fuente said.
Thomas Back in Mexico City tblack@bloomberg.net |
| |
|
Vallarta Weddings
Tell a Friend
Site Map
Print this Page
Email Us