Flu worries hurt peso

Flu worries hurt peso

Story link: Flu worries hurt peso

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The Mexican peso was hurt by the spreading swine flu outbreak there on concerns that the economy will be hurt by fewer tourists and less consumer spending as those concerned about contracting the disease stay home.

It is feared that reduced tourism will hurt the economy, which depends on tourist dollars as its third most important source of foreign income, after oil and money sent back home by Mexicans working in other countries.

In late morning trade in New York, the Mexican currency traded at 13.7402 pesos to the dollar while it took ¥7.0337 to buy a peso.

The US dollar and the yen, on the other hand, saw gains as worries about the flu outbreak fed a desire among investors for safe places to put their money, while the Australian and New Zealand dollars and the South African rand all declined on fears that the flu will spread, worsening economic conditions around the globe.

The yen traded at ¥126.6986 to the shared currency while it took $1.3116 to buy a euro, while the Japanese currency traded at ¥96.61 to the greenback ahead of a report expected to say that the US economy shrank by 4.7 percent in the first quarter and on comments from White House economic advisor Lawrence Summers that US employment will likely continue to decline for most of the year.

Meanwhile, the Australian dollar was worth 71.51 cents US, it took 56.86 cents US to buy a New Zealand dollar, and the South African rand traded at R8.7564 to the greenback.

The pound weakened after Hometrack Ltd. reported that UK house prices were down by 0.3 percent in April, the 19th month in a row that prices fell and on a report from the British Bankers’ Association which said that approvals for home loans were down to 26,097 loans in March, down almost 2,000 from February’s approvals.

In addition, former UK Treasury advisor Roger Bootle said that the UK could see 1930s-style depression on the sliding home prices.

At nearly 11:30 a.m. in New York it took $1.4648 to buy a pound while the yen traded at ¥141.4897 to the UK currency, but the pound was stronger versus the euro as it traded at 89.55p to the shared currency.