Mexican Peso Tumbles to Two-Month Low Amid Rally in U.S. Dollar

By Valerie Rota

Sept. 2 (Bloomberg) -- Mexico's peso dropped to a two-month low after the U.S. dollar rallied against all major currencies amid falling prices for oil.

The peso fell 0.4 percent to 10.3811 per dollar at 9:52 a.m. New York time, compared with 10.3361 yesterday. Earlier, it touched 10.3974, its weakest since July 3.

The decline in the world's 16 major currencies against the U.S. dollar today ranged between a 0.3 percent drop in the Canadian dollar and a 2.1 percent slide in the Australian dollar as investors bet falling oil prices and seven Federal Reserve rate cuts in the past year will spur U.S. economic growth.

Crude oil declined 6.3 percent to $108.18 per barrel in trading on the New York Mercantile Exchange.

The U.S. is Mexico's biggest trading partner, buying about 80 percent of its exports.

Yields on Mexico's 10 percent bond due in December 2024 fell 4 basis points, or 0.04 percentage point, to 8.48 percent. The bond's price rose 0.38 centavo to 113.34 centavos per peso, according to Banco Santander SA.

To contact the reporter on this story: Valerie Rota in Mexico City at vrota1@bloomberg.net.