Trump's Rising Poll Numbers Hurt Mexico's Economy
Rafa Fernandez De Castro - Fusion
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September 20, 2016
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
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