Mexican peso reverses losses despite dollar strengthening on improved US economic outlook.
The Mexican peso erased early losses and rose 0.53% to 19.84 per dollar near the close, even though most Latin American currencies closed lower on Wednesday, October 23, amid a stronger global dollar and a drop in oil prices.
A series of positive economic data from the United States continues to temper expectations about Federal Reserve cuts after the agency’s Beige Book showed that US activity barely changed between September and early October.
The Mexican peso, which has lost 15% this year, is seen as one of the most vulnerable emerging market currencies if Donald Trump wins the election, and imposes strong tariffs.
Traders in Mexico are bracing for wild swings in the peso following the US election in less than two weeks, with Kamala Harris and Donald Trump in a tight race.
“If Kamala Harris wins the election, I would expect a relief rally that would take the peso below 19 per dollar. If Trump wins with a ‘red sweep,’ the peso would reach 20.5,” said Francisco Campos, chief economist for Latin America at Deutsche Bank.
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