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MEXICO CITY, March 3 (Reuters) - Mexico’s peso strengthened on Tuesday as market players speculated the central bank could come up with new ways to brake the currency’s relentless slide, while stocks gained.
Mexico’s central bank said it burned through $620 million of its dollar reserves last week, adding to the billions of dollars already spent since October to prop up the peso.
The peso has taken a beating in recent months on worries about the ever-deeper U.S. recession, which is choking off demand for Mexican exports.
Some market players said they had heard talk the central bank was considering new ways to help the currency.
“The chances are rising that there will be new measures (taken) by the central bank,” Actinver brokerage said in a report.
Traders also cited Australia’s surprise decision, earlier Tuesday, to hold interest rates steady as a factor helping bolster global sentiment and support the peso.
On the stock market, dominant retailer Wal-Mart de Mexico (Walmex) WALMEXV.MX led gains in the stock market, rising 2.97 percent to 28.45 pesos.
Investors were betting that U.S. Treasury Secretary Timothy Geithner would shed light on plans to shore up the U.S. financial system, giving a boost to U.S. stocks, which could also benefit Latin American shares. (Reporting by Jason Lange, Editing by Walker Simon)
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