Donald Trump’s threats to dump the North American Free Trade Agreement (NAFTA) agreement with Mexico and Canada, and to tax money sent home by migrants to pay for the controversial wall on the southern border, have made the peso particularly vulnerable to events in the U.S. presidential race.
As Trump strode toward victory, the peso plunged 13 percent in its biggest fall since the Tequila Crisis devaluation 22 years ago, before paring losses to trade down 8.7 percent at 19.91 per dollar. Still, officials held back from taking action to support the peso despite it hitting lifetime lows overnight.
Still, President Enrique Peña Nieto said he called to congratulate Trump, and had agreed to meet the New Yorker during the transition phase to discuss joint cooperation, which he hopes would strengthen the competitiveness of North America.
Mexican President Enrique Peña Nieto and U.S. presidential candidate Donald Trump. (PHOTO: elnuevoherald.com)
Welcoming Trump’s victory speech pledge to seek “common ground” and partnership with other countries, Peña Nieto said in a televised statement that Mexico shared the same vision.
“Dialogue to make agreements is still the best route for Mexico, and my government will seek opportunities that benefit both nations in this new phase of bilateral relations,” he said.
Gabriel Casillas, an economist at Banorte, predicted Trump’s victory will shave 0.3 percentage point from 2016 economic growth, and said the peso could suffer for months as the market tries to figure out what Trump could do in office.
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