Mexican Peso Plunges To Two-Year Low As Trump Gains Ground In U.S. Election
Date
11/6/2024 5:00:29 AM
(MENAFN- The Rio Times) The Mexican peso tumbled to its weakest level in over two years as U.S. election results trickled in. Traders braced for potential market upheaval amid signs of a trump comeback.
The peso dropped as low as 20.7710 per dollar, marking a 3.2% decline from the previous day's close. This sharp depreciation reflects growing concerns about Trump's campaign promises.
His vows to impose new tariffs on Mexican exports have rattled investors. The peso 's reaction mirrors its 8.5% plunge following Trump's 2016 victory.
Market analysts expect continued volatility in the coming days. Vote counting may stretch on, prolonging uncertainty for the peso. Jorge Gonzalez, a currency risk consultant, predicts extended market reactions throughout the week.
The peso's weakness stems from more than just election jitters. Earlier this year, Mexico's ruling party secured large congressional majorities. This paved the way for controversial judicial reforms that worried some investors.
Overall, the Mexican currency has lost about 18% of its value against the dollar in 2024. This decline highlights the peso's sensitivity to both domestic and international political shifts.
Analysts have outlined potential scenarios based on election outcomes. A Harris win could strengthen the peso to 18.30-19.00 per dollar. Conversely, a Trump victory might push it to 21.14-22.26 per dollar.
Beyond the election, other factors will influence the peso's trajectory. These include pending Mexican Supreme Court decisions and central bank policies.
The ongoing impact of nearshoring trends also plays a role in Mexico's economic outlook. As markets digest the election's implications, traders will closely watch the peso.
Its movements may signal broader trends for the Mexican economy in the years ahead. The currency's stability remains crucial for investor confidence and economic growth.
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