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Trump's Rising Poll Numbers Hurt Mexico's Economy

Rafa Fernandez De Castro - Fusion
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September 20, 2016
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People stand outside an exchange house advertising the sale of U.S. dollars at the rate of 19.90 Mexican pesos per dollar in Mexico City, Monday, Sept. 19, 2016. The Mexican currency reached the psychological barrier of 20 pesos per dollar, and analysts and commentators cited the role of the U.S. presidential campaign. (AP Photo/Marco Ugarte)

Update: Mexico’s Central Bank Tested by Traders as Peso Falls to Record (Bloomberg)

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.

But the extent of the damage might have been greater than initially reported. Some economists are now saying that the Republican’s recent rise in the polls appears to be a contributing factor to the accelerated depreciation of the peso against the dollar. And the situation is making investors very uneasy.

“Trump’s rise in the polls is a major factor affecting the Mexican economy,” Alfredo Coutiño, director for Latin America at Moody’s Analytics, told Fusion. “The possibility of a Trump presidency is probably postponing investment decisions by companies on both sides of the border. It doesn’t mean they are suspending them, but simply waiting to see what happens.”

Some companies seem to be betting Trump won’t win. For example, Ford recently announced it would move its entire production of small cars from the U.S. to Mexico, a decision that drew heavy criticism from the Trump campaign.

But Coutiño says most investors are playing it cautious. And the ripple effects are being felt by Mexico’s exchange rate.

Read the rest at Fusion

Related: It Looks Like the Chance of a President Trump Is Starting to Hit Canada's Currency (Bloomberg)

Related: Analysts Cite Clinton's Illness in New Plunge by Mexico Peso (Associated Press)

Related: Trump Trade Policy May Push US Into Recession: Study (PressTV)

Related: As Mexico Currency Weakens, Border Retailers Feel the Bite (Brownsville Herald)

Mexican peso-U.S. dollar exchange rates since 1993

Year Average Rate

1993 3.124857

1994 3.386613

1995 6.447410

1996 7.601786

1997 7.918685

1998 9.153214

1999 9.556951

2000 9.458103

2001 9.338989

2002 9.606861

2003 9.940000

2004 11.012778

2005 10.892538

2006 10.900205

2007 10.930662

2008 11.178315

2009 13.502932

2010 12.635195

2011 12.429192

2012 13.157211

2013 12.761838

2014 13.305641

2015 15.792253

2016 18.206238

Average 10.509936

  Check out Republicans Abroad

  Check out Overseas Vote Foundation (OVF)

  Check out Democrats Abroad Mexico


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