Mexico’s peso slid to a three-week low Tuesday Nov. 1 after a poll showed Republican candidate Donald Trump ahead in the presidential race a week before the vote, Bloomberg News reported.
The currency fell 1.1 percent to 19.0652 as of 8:04 a.m. in Mexico City after the ABC News/Washington Post tracking poll placed Trump 1 percentage point ahead of Democratic rival Hillary Clinton. The peso fell 0.8 percent on Friday after the Federal Bureau of Investigation said it was re-opening an inquiry into Clinton’s use of e-mail. The Brazilian real fell 0.7 percent, reversing an earlier gain.
Mexican exporters are heavily dependent on access to the U.S. market and Trump has said he would revisit the North American Free Trade Agreement that governs commerce between the two countries, threatening the motor of Mexico’s growth. The peso is the second-most liquid currency in emerging markets and has become an easy-to-trade proxy for investors’ perceptions of who will win the White House.
“The Mexican peso is really being driven by what’;s going on in the U.S. elections,” said Simon Quijano-Evans, an emerging-market strategist at Legal & General Group Plc in London. “This is going to be the case for many emerging-market currencies for the next seven days: markets are going to be second-guessing what a Trump win or loss means. The Mexican peso has a higher correlation, but there is general spillover.”
The tracking poll released Tuesday showed Trump has 46 percent support nationwide among likely voters, compared with Clinton’s 45 percent. The survey was conducted Oct. 27-30, with a margin of error of plus or minus 3 percentage points.
Source: bloomberg.com