By Noe Torres MEXICO CITY (Reuters) -The Mexican peso sank against the U.S. dollar as results in the U.S. presidential election rolled in, extending a streak of volatility which has hit the currency in recent days. The peso dropped as low as 20.7710 per dollar for the first time since August 2022, about 3.2% weaker […]
Business
Volatile Mexican peso hits 2-year low, traders lean toward Trump win
Audio By Carbonatix
By Noe Torres
MEXICO CITY (Reuters) -The Mexican peso sank against the U.S. dollar as results in the U.S. presidential election rolled in, extending a streak of volatility which has hit the currency in recent days.
The peso dropped as low as 20.7710 per dollar for the first time since August 2022, about 3.2% weaker than its closing price from the previous session.
The peso’s weakness came as traders priced in the possibility that Republican Donald Trump could defeat Democratic candidate Kamala Harris. Trump has vowed to impose new tariffs on Mexican exports.
Traders are bracing for more fluctuations as the vote counts from the hotly contested U.S. presidential election come in.
After Trump’s 2016 presidential victory, the peso plummeted around 8.5% on the dollar to a then-historic low.
Reuters’ vote count shows Trump so far winning 230 Electoral College votes against 169 for Harris. A candidate needs at least 270 electoral votes to win.
“Since it’s such a close election and results will be slow to come in, we’ll likely see the reality (of the impact on the peso) during trading in London, tomorrow in the U.S. or even through the rest of the week,” said Jorge Gonzalez, who heads the consultancy Asesores en Divisas y Riesgos.
Earlier this year, the value of the local Mexican currency was battered after the ruling Morena party of leftist President Claudia Sheinbaum secured large majorities in Congress following June’s general election in Latin America’s second-biggest economy.
The congressional majorities paved the way for lawmakers to pass a controversial judicial overhaul in September that has provoked market jitters, with some investors doubting the safety of their investments under a more politicized judiciary.
Officials in the United States, by far Mexico’s top trade partner, have criticized the overhaul.
The peso has shed around 18% of its value so far this year against the U.S. dollar.
(Reporting by Noe Torres and Kylie Madry in Mexico City; Editing by Leslie Adler, Shri Navaratnam and Jacqueline Wong)