Mexican Peso Tumbles in Wake of Election Results

November 11, 2016

The chart of the week shows the performance of the Mexican Peso from November 8th through the 10th. The Peso served as a barometer of sorts throughout the U.S. presidential campaign, as Donald Trump had pledged to renegotiate the North American Free Trade Agreement (NAFTA) and stop illegal immigration by building a wall along the U.S./Mexican border. On Election Day, the Peso hit a high of $0.055 (1 Peso can buy 0.055 USD) at 7PM ET and quickly sold off as it became increasingly clear that Hilary Clinton was struggling to win key swing states. The Peso hit a low of $0.048 at 11pm ET as more polling data came through showing Donald Trump was leading and a Clinton victory would be harder to pull off. The Peso bounced slightly higher following a gracious acceptance speech from President-elect Trump but still remains near its lows as details about his NAFTA and wall plans have still not been announced. Trump’s policies regarding NAFTA and immigration will be critical to watch, as the volatility we saw with the Peso this week underscores how Mexican stocks could be materially impacted by changes to current policy. Such movement also reinforces the importance of diversification across countries when investing in global equities.

The opinions expressed herein are those of Marquette Associates, Inc. (“Marquette”), and are subject to change without notice. This material is not financial advice or an offer to purchase or sell any product. Marquette reserves the right to modify its current investment strategies and techniques based on changing market dynamics or client needs.

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