September 13, 2012 / 5:06 PM / 5 years ago

Mexico peso firms to over 4-month high on Fed plan

MEXICO CITY, Sept 13 (Reuters) - Mexico’s peso firmed strongly on Thursday after the Federal Reserve launched another aggressive stimulus program to boost the economy of the United States, Mexico’s top trading partner.

The peso firmed 0.74 percent to 12.92 per U.S. dollar, its strongest since early May.

The Fed said it will buy $40 billion of mortgage debt per month and continue to purchase assets until the outlook for jobs improves substantially.

Mexico sends most of its exports to the United States and growth in Latin America’s second-biggest economy cooled in the second quarter on waning U.S. demand.

U.S. monetary stimulus also tends to drive down Treasuries yields, increasing the appeal of higher-yielding emerging market assets. Previous Fed stimulus programs have spurred rallies in the peso as foreign investors buy up local currency debt.

Mexico’s benchmark stock index also shook off early losses to edge up 0.1 percent to 40,283.

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