Mexican Peso Reaches Record Low After Donald Trump Becomes President
Donald Trump becoming the President of the USA is a major political upset that carries much greater importance than the Brexit. As the poll results were pouring in, the US Dollar weakened considerably. However, after the conciliatory speech of Donald Trump the USD surged and it also affected Mexican Peso simultaneously.
After the announcement of results, the Mexican Peso recorded a 12% decrease in value and reached 20.77 against US dollar. It was suspected that the Donald Trump Presidency would affect the NAFTA trade deal and scrape it altogether. This can have a serious impact on the Mexican economy. The decrease in Peso value recovered slightly after the Presidential speech because Trump didn’t mention about the NAFTA trade deal during the speech.
The central bank stopped itself from raising the interest rates and this puts the Mexican Peso under pressure. The Mexican government has announced that it won’t spend money for the border wall after the surprise results of the US presidential election. Even though the currency hit lifetime low values within a night, the Mexican officials have not taken any drastic measure to support the value of Peso. The fall of Peso is the biggest in the last 22 years.
The President of Mexico, Enrique Pena Nieto has tweeted that the neighboring countries should work together for the development of North America. Even though the Trump administration has not made policy declaration, it would become an economical burden for Mexico if the financial flow and trade is disrupted.
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