Mexico peso leaving Trump behind as currency hits 10-month high

15/06/2017 08:25 AST

The Mexican peso is riding a wave of emerging-market optimism to trade at levels last seen when Donald Trump was a longshot to win the presidency.

After seven straight days of gains -- the longest winning streak since 2012 -- the peso touched 18.03 per dollar on Tuesday, the strongest since August, when Trump was a candidate pledging to tear up trade agreements and build a wall along the Mexican border. His election sent the peso into a record-breaking tailspin as traders fretted about the effect on Mexico’s economy, but the losses since the Nov. 8 ballot have now been erased.

With the Trump administration occupied by a domestic agenda focuses on taxes and healthcare, and after comments about trade that seemed more favorable toward Mexico, investors see it as less likely to pursue a damaging renegotiation of the North American Free Trade Agreement. That’s helped make the peso the best performer among major currencies this year as it climbed 15 percent, while volatility tumbled.

Trump’s power over the peso “has diminished greatly compared to what we saw during the campaign and until he took power,” said Juan Carlos Alderete, a foreign-exchange strategist at Banorte-Ixe in Mexico City. The expectation now is that “Nafta renegotiation will leave things at least broadly unchanged.”

Mexico has been increasing interest rates and the peso has posted the best trade return in the world this year for carry-trade investors, who borrow in countries with low interest rates to invest where yields are higher. Traders also appreciate that one-month volatility is now near the lowest since the end of last year, according to Christian Lawrence, a strategist at Cooperatieve Rabobank UA in New York.

Trump’s anti-Mexico rhetoric “is probably nearly all out of the price,” he says. “Carry has been a huge driver.”

The Peninsula
Forex News
2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | News Archive
Most Viewed Companies
Ticker Price Volume
QNBK 134 249,399
GFH 0.49 144,733
EMAAR 8.42 3,692,923
DSI 0.39 5,020,221
OOREDOO 1165 1,473
DHBK 30.35 233,681
CBQK 29.9 22,876
Recent News

Kuwait current account surplus narrows in Q1
Kuwait’s current account surplus fell for the first time in three quarters at the start of 2017, narrowing from KD600 million ($1.98 billion) in the fourth quarter of 2016 (4Q16) to KD300 million in

Saudi Arabia's 13b riyal sukuk nearly three times oversubscribed
Saudi Arabia, the Arab world's largest economy, said its 13 billion Saudi riyal (Dh12.7bn) Islamic bond sale drew demand for nearly three times the amount of sukuk on sale.


Saudi Aramco receives bids for contracts in gas expansion drive
Saudi Aramco has received bids from international engineering companies to build gas booster compressor stations at Haradh and Hawiyah, industry sources said, as the country plans to diversify its en

IHG to distribute 3% cash dividends
Investment Holding Group’s (IHG) general assembly has approved the board’s recommendation to distribute cash dividends to shareholders at a rate of 3% (for 2016) of the nominal value of the share equ

Oman shares retreat on weak investor sentiment
Oman’s benchmark MSM30 Index retreated 0.34 per cent to end the session at 4,955.27 points. The MSM Sharia Index closed at 729.86 points, down 0.58 per cent. Al Anwar Holding was the most active in t

GulfBase GCC Index
Search By
  • Company Symbol
  • Company Name
  • Mutual Fund Name
  • News Content
Send this page to a friend


Looking ahead, what change you are more likely to make in investing in your domestic stock market?