Mexico’s peso was under pressure on Thursday after a rating downgrade and as trade talks between Washington and Mexico City rumble on ahead of a proposed US levy on exports from its southern neighbour. The currency was down 0.6 per cent against the dollar at 19.70 in London dealings, softening a fall late in the New York afternoon of 1.2 per cent.
Fitch Ratings downgraded Mexico’s debt rating to BBB from BBB+ on Wednesday June 5th, and Moody’s Investors Service changed its outlook to negative from stable amid concerns over state energy company Pemex and as the US was poised to slap tariffs on Mexican exports from Monday.
President Donald Trump tweeted overnight that talks with Mexico will resume on Thursday June 6th, “with the understanding that, if no agreement is reached, tariffs at the 5 per cent level will begin on Monday June 10th, with monthly increases as per schedule.
The higher the tariffs go, the higher the number of companies that will move back to the USA!” In a separate tweet he said of the talks: “Progress is being made, but not nearly enough!”