Mexico peso slips after Bernanke warns on US economy

Mexico's peso slipped on Monday and stocks dipped after Federal Reserve Chairman Ben Bernanke cautioned that the economy remained fragile in the United States, Mexico's top trading partner. The peso slipped 0.11 per cent to 12.69 per US dollar. The IPC stock index closed down 0.06 per cent to 32,085.17 despite a more than 3 per cent jump in shares of index heavyweight Wal-Mart de Mexico after the company announced a deal to buy Walmart Centroamerica. Bernanke told the Economic Club of Washington that tight credit and a weak labour market would be "formidable headwinds" that would hold back growth. Mexico, which sends around 80 per cent of its exports to its northern neighbor, is counting on a rebound in US consumer demand to help recover from a deep local recession. "Consumption (in the United States) is going to remain very fragile, very weak, even though employment numbers are improving, it does not mean that they are hiring again," said Oscar Jimenez, an analyst at Multivalores in Mexico City.