Mexico’s peso weakened and the country’s stocks fell after a poll showed Donald Trump is leading Hillary Clinton by five points in Ohio, a state that has backed the winning presidential candidate in every election since 1964, Bloomberg news agency reported.
The peso declined 0.8 percent to 19.2352 per dollar by 12:47 p.m. Wednesday in New York, reversing gains of as much as 0.4 percent before the Bloomberg poll. Mexico’s IPC stock gauge slumped 0.9 percent, even as regional benchmarks from Brazil to Colombia to Chile posted gains. The losses worsened during the day as prices fell for oil. Mexico is the world’s ninth-largest producer.
Republican front-runner Donald Trump has drawn attention in Mexico by talking about Mexican migrants being rapists and bringing drugs to the US, and building a US-Mexico border wall. (Photo: Bloomberg)
The currency is “being thumped by Trump,” said Per Hammarlund, the chief emerging-market strategist at SEB SA in Stockholm. “The peso looks set to drift lower as long as Hillary Clinton is off the campaign trail.”
Mexico’s exchange rate has weakened 4.9 percent this quarter, the worst performance among 24 emerging-market currencies tracked by Bloomberg. Trump has said he may seek to dismantle the North American Free Trade Agreement and that he’d make Mexico pay for a wall along the U.S.’s southern border by withholding immigrant remittances.
The IPC is moving on “uncertainty related to upcoming events like the Fed meeting and elections in the U.S.,” said Marco Medina, an equity analyst at Casa de Bolsa Ve Por Mas in Mexico City. “You can’t discount the impact that a Trump presidency would have for Mexico and we’ve seen him gaining favor in the polls.”
Source: bloomberg.com
