mexico stocks and currency rebound on signs of us recovery
News Posted On: 22 September 2009
The Mexican stock-market and currency took a massive jump last week, when further clear signs of an economic recovery in the US, led to prices of Cemex stocks soaring, on bets that the major US supplier would benefit hugely from the US recovery.
Cemex stocks climbed 6% in the New York exchange, and the Mexican peso advanced by 1% then it was revealed that US industrial output had climbed for the second consecutive month in August.
"This was an effect we predicted, although it isn't really a prediction, more like common sense," said Liam Bailey a sector specialist web copywriter.
"The US is Mexico (and many other Latin American countries) biggest trading partner and it is the US crash that has had the biggest downward effect on economies throughout South America. It is logical that South America will benefit hugely from recovery in the US, and as we have seen in recent days, from even signs of recovery in the US," he explained.
Mexico's economy shrank 10.3% in the second quarter, when many economies made their first foray into positive territory. If this is indeed the start of a recovery in the US economy, it is unlikely that Mexico's economy will contract in the third quarter.
"I don't think the Mexican economy will contract by anywhere near 10% in the third quarter. Possibly a 0.5 contraction, or less. I believe this because the US economy has been contracting by less and less the last few quarters, so imports from Mexico will be increasing as we speak," Bailey said.
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