Dollar holds up, Mexican peso back from historic lows

“It will be very hard for President Enrique Pena Nieto to maintain good relations with Trump because there will be a national resistance in the Mexican press and public opinion”.

The country’s currency crashed more than 11% to an all-time low Tuesday evening, as the USA election race tightened and the prospect of a Donald Trump presidency rose. He added that relationship needs to be cultivated, not only economically, but politically and culturally. The dollar has gained almost 13 percent against the peso this month. If the USA was found in violation by the WTO of discriminating against its trading partners, Schott said, those partners could retaliate with tariffs of their own. That was Bill Clinton in 1995’s Tequila Crisis, figuring that a stable, prosperous neighbor was better for America than the opposite. He’s vocal about ditching the Waters of the United States rule, potentially putting a farmer as head of the Environmental Protection Agency, and he’s been supportive of the RFS.

NAFTA became a source of friction with America’s neighbors during the U.S. election campaign, when Trump called it the worst trade deal the United States had ever signed. Mexicans living overseas, majority in the US, send a lot of money each year back home to support families.

It’s not clear how long the Mexican peso could see its value so low, explained Richard Merritt, President of Elliott D. Pollack and Company.

Re-opening NAFTA would affect Canada’s auto sector because it is interconnected with the US and the Mexican industries, he added. For years, the Obama administration has been negotiating the Trans-Pacific Partnership, a trade pact involving 12 Pacific Rim nations, including the United States, Japan and Australia. That money is a direct infusion of cash into the Mexican economy, used to buy goods and services.

Nafta came into effect between the three countries in 1994.

Trump is showing support for other agricultural related policy and issues.

Whether it has ultimately helped or harmed Americans is hotly debated.

Mexican-based economists had expected a snap interest rate rise, but central bank governor Agustin Carstens said on Wednesday morning that the bank would take any necessary measures pending market conditions.

Trump, though, can not easily nix NAFTA.

Today’s volatility suggests more change to come, with the market uncertainty surrounding the presidency of Republican victor Trump showing no signs of easing in the emerging markets. During his campaign, Trump has made promises such as building walls, terminating deals in trades and imposition of higher tariffs on vehicles that will be imported in American soil. Mexico can feel justly aggrieved by his words.