The Mexican peso, which tumbled to a record low ahead of the U.S. presidential debate, rallied as the event got underway in Hempstead, New York, surging as much as 1.1 percent.
09/25/16 Financial Times
The piñata is a papier-mâché model stuffed with sweets that eager Mexican children thump with sticks. Lately, the Mexican peso has seen the stuffing knocked out of it too. It has sunk to levels not seen in real terms since Mexico’s 1994-95 Tequila crisis. One of the reasons for this, among several, is that Donald Trump could become the next president of the US. One of the world’s most heavily traded emerging market currencies is taking one for the world in an early wallop of rising “Trump risk”.
09/25/16 Los Angeles Times
The battered Mexican peso has tumbled to historic new lows in recent days, nearing a psychological barrier of 20 pesos to the U.S. dollar and causing anxiety on the streets, at businesses and in the halls of government.
Among other factors, many point to the recent rise in U.S. presidential polls of Donald Trump, the Republican nominee who has vowed to build a wall along the U.S.-Mexico border and has been widely accused here of Mexico-bashing.
Mexico’s Minister of the Economy Ildefonso Guajardo Villarreal says his predominantly Catholic country is prepared to go to unholy extremes if Republican candidate Donald Trump gets elected in November.
“If we have to talk to the devil to guarantee the safety and the future of the Mexican people—in Mexico and the U.S.— then Mexico we’ll talk to the devil,” Guajardo Villarreal said during an Americas Society/Council of the Americas panel discussion Wednesday night in New York City.
As far as Citigroup Inc. is concerned, Mexico has little choice but to carry out an unprecedented interest-rate increase to arrest a plunge in the peso triggered by Donald Trump’s recent surge in U.S. presidential polls.
Mexico’s exchange rate has tumbled 6.7 percent in the past month, the biggest slide among the world’s major currencies. Citigroup economist Sergio Luna now predicts Banco de Mexico will lift its key lending rate by 0.75 percentage point on Sept. 29, the most since the bank adopted a new benchmark in 2008.
The Mexican peso ended its longest losing streak since February as traders bet the central bank will step in to stem losses fueled by concern over the outcome of the U.S. presidential race.
The peso strengthened 0.4 percent to 19.7257 per dollar as of 5:23 a.m. in Mexico City, its first advance on a closing basis in seven days. The move is in line with currencies of other commodity producers as oil prices climbed back toward $45 per barrel in New York and the Bank of Japan’s monetary stimulus boosted demand for riskier assets.
A Trump presidency could be a nightmarish scenario for Mexico. And his candidacy alone is already causing some sleepless nights for Mexican economists.
Trump’s trip to Mexico City in late August quickly turned into a diplomatic fiasco for the Peña Nieto administration, reportedly leading to the resignation of Mexico’s Finance Minister Luis Videgaray.