Mexican Peso drops as Polls Swing

The Mexican peso swings due to U.S. presidential election sentiment this morning. The peso has swung back and forth between record lows against the U.S. dollar and rebounds as Donald Trump rises and falls in election opinion polls. According to Predictit.org, Trump’s odds of winning are nearing highs, causing the Mexican currency to fail again.

“People tend to agree that Mexican assets would underperform under a Trump presidency — that’s clear for the market,” said global FX rates strategist Andres Jaime from Barclays. Trump has even suggested building a wall on the Mexico-U.S. border and threatening to withdraw the U.S. from the North American Free Trade Agreement.

In late September, the Mexican peso hit record lows against the U.S. dollar due to polls indicating a tight race between Trump and Clinton ahead of the first debate. Then the peso rose against the dollar during the first debate as Clinton clearly gained momentum against Trump.

Friday afternoon, James Comey, director of the Federal Bureau of Investigation, said his agency is looking at new emails related to Clinton which increased concerns that Trump may win the election. The Mexican peso dropped immediately as high as 2 percent against the dollar.

“Right now markets are debating whether that’s enough to change the election or not,” Jaime said. “That’s why markets are very nervous about it. There’s no certainty about it.”

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