A Victim of Trump (and Fundamentals), the Peso Falls

11/14/2016 Forbes.com, Mexico Institute Blog

By Viridiana Rios, Global Fellow, Mexico Institute

pesoI write today as a middle class Mexican whose savings lost 10 percent of their value when American voters elected a leader who pledged to renegotiate NAFTA and tax us to pay for a wall. As a result of the election and other factors, the Mexican peso has overtaken the Argentine peso and the South African Rand to become the emerging markets 2016 worst performer.

The Mexican Peso was a barometer for the presidential campaign. It lost 10 percent of its value when Clinton lost, 1.9 percent in the week after the FBI reignited Clinton’s email controversy, and hit its historical low in the days following the election as speculation turned to the potential impact of Trump’s first months in office. The peso spiked 1.3 percent in less than an hour during the first presidential debate, and when Trump’s lewd conversation about women broke, it gained 2.2 percent.

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Mexico peso jumps after FBI clears Clinton over emails ahead of election

11/6/16 Reuters

peso by Guanatos GwynMexico’s peso jumped on Sunday after the FBI announced it stood by a previous decision to not charge Democratic candidate Hillary Clinton over emails related to her private server, a decision that comes just two days before the election.

The peso MXN=D2, which has been hit by the rise of Republican candidate Donald Trump and his policies that are seen hurting Mexico’s economy, extended gains to rise 2.25 percent to 18.584 per dollar.

It was the currency’s strongest intraday level since Oct. 26.

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Mexican Peso Slides After U.S. Poll Shows Trump Edging Ahead

11/1/16 Bloomberg

mexican pesosMexico’s peso slid to a three-week low after a poll showed Republican candidate Donald Trump narrowly ahead in the presidential race a week before the vote.

The currency fell 1.8 percent, the most in almost four months, to 19.2088 per U.S. dollar as of 12:37 p.m. in Mexico City after the ABC News/Washington Post tracking poll placed Trump 1 percentage point ahead of Democratic rival Hillary Clinton, within the margin of error. The peso fell 0.8 percent on Friday after the Federal Bureau of Investigation said it was re-opening an inquiry into Clinton’s use of e-mail. The Brazilian real fell 1.5 percent, reversing an earlier gain.

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Mexico Peso Trades Little Changed After U.S. Presidential Debate

10/19/16 Bloomberg

peso by Guanatos GwynMexico’s peso traded in line with emerging-market peers after the third U.S. presidential debate, signaling traders saw nothing in the matchup that changed their perception of who is likely to win the election.

The currency was little changed at 18.5241 per dollar as of 6:35 a.m. in New York, paring gains of as much as 0.4 percent in the immediate aftermath of the debate. A gauge of emerging market currencies slipped 0.1 percent.

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Bank of Mexico Stresses Inflation Risk in Raising Rates

10/13/16 The Wall Street Journal 

Agustin_CarstensMEXICO CITY—The Bank of Mexico’s five board members all agreed last month that higher interest rates were necessary to stave off incipient inflation pressures amid a number of external and local risks to the Mexican peso, minutes of the meeting showed Thursday.

The board voted unanimously on Sept. 29 to raise the overnight interest rate target by a half percentage point to 4.75%, its third rate increase of the year, after the peso had again reached new lows against the U.S. dollar.

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Mexico market volatility could ease if Trump situation ‘resolves itself’: cbank governor

10/12/16 Reuters

carstensMexico’s central bank governor Agustin Carstens said on Wednesday that volatility in local markets could ease if the situation involving U.S. Republican Presidential hopeful Donald Trump “resolves itself.”

Noting that Trump has made “very specific” comments about Mexico, Carstens told local radio that “everything points to this resolving itself and let’s hope that is the case. And from then on, I expect that we could see much less volatility in our markets.”

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Mexico’s Peso Just Can’t Catch a Break as Global Risks Abound

10/13/16 Bloomberg

pesoFor investors who think calmer seas await the Mexican peso after the U.S. presidential election, the top forecaster of the currency has some bad news: The next proverbial Donald Trump is just around the corner.

The peso is poised to lose whether or not the Republican candidate makes it to the White House in next month’s vote, says Juan Carlos Rodado, director of Latin America research at Natixis North America and the most-accurate forecaster in the third quarter, according to Bloomberg rankings.

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