Mexico feels the effect of U.S. financial crisis and severity of floods

The money that Mexicans living in the U.S. send home, a lifeline for both the economy here and millions of families, has suffered its steepest decline on record, dragged down in large part by the American financial crisis.

The bad news, announced Wednesday by the Bank of Mexico, follows government assurances that the U.S. crisis would not have a severe effect on Mexico.

MEXICO - La Secretaría de Gobernación publicó seis declaratorias de Emergencia y una de Desastre Natural por la ocurrencia de lluvias e inundaciones en diversos municipios de Chihuahua, San Luis Potosí, Sinaloa, Sonora y Veracruz

Sept. 30 (Bloomberg) -- Mexico's peso strengthened for the first time in three days on speculation the U.S. Senate will salvage a $700 billion bank bailout package after the House of Representatives rejected it yesterday.

Demand for pesos rose on optimism approval of the plan to rid financial institution of bad loans will bolster economic growth in the U.S., the biggest buyer of Mexican exports. The defeat of the plan in the House yesterday sent the peso tumbling 2.3 percent, its biggest drop in more than five years.

``Approval of the package is essential for keeping financial markets from entering into a profound crisis,'' said Jaime Ascencio, a fixed-income strategist at Mexico City-based Actinver SA, the country's biggest independent money manager. ``There's more tranquility in the market today.''

The peso strengthened 0.85 percent to 10.9378 per U.S. dollar at 5 p.m. New York time, from 11.0320 yesterday, when it touched its weakest level in a year.