(Updates with peso's continued strengthening)
MEXICO CITY, March 16 (Reuters) - Mexico's peso
strengthened more than 1% against the U.S. dollar in afternoon
trading on Thursday, recouping some of the ground lost in
previous days to fears of a broader financial crisis triggered
by bank failures in the U.S.
The peso moved to 18.72 per dollar by 1.52 pm
Mexico City time (1952 GMT), a rise of 1.2%, after it
depreciated close to 2% against the greenback the previous day.
The currency has been volatile in recent days, sliding
around 3% against its U.S. counterpart in the last week as
traders flocked to the safe-haven dollar.
"The appreciation (of the peso) is due to the reduction
of risk aversion in the global financial market," analysts at
Mexico's Banco Base said. "However, additional upward pressures
cannot be ruled out."
The failures of
Silicon Valley Bank
(SVB) and Signature Bank last week have shaken markets in
the U.S. and Europe.
Their collapses came as central banks have rapidly hiked
interest rates to fight inflation, helping to depress the prices
of older government bonds held by investors.
The tumult has fueled speculation that central banks may
rethink their strategies on monetary policy.
Mexico central bank deputy governor Galia Borja
told Reuters
earlier Thursday the institution's main focus was tackling
inflation, despite the global anxieties over a banking crisis.
(Reporting by Kylie Madry; Additional reporting by Aida
Pelaez-Fernandez
Editing by Dave Graham)
