Reuters Poll Sees Mexico Peso Plunging 10 Percent if Trump Wins US Election Silvio Cascione - Reuters
go to original November 2, 2016

People stand outside an exchange house advertising the sale of U.S. dollars at the rate of 19.90 Mexican pesos per dollar in Mexico City (Marco Ugarte/AP)

Mexico's peso could plunge more than 10 percent to a record low against the dollar in a matter of weeks if Donald Trump wins the U.S. presidential election on Nov. 8, according to a Reuters poll of currency strategists published on Tuesday.

The likelihood of a Hillary Clinton victory is mostly priced in as opinion polls continue to show an edge to the Democratic candidate, the survey suggested.

But a small, short-lived relief rally still looks likely under that scenario following months of heated debates over Trump's proposals to build a border wall and rewrite trade agreements with Mexico.

Forecasts for most other currencies in the region were revised slightly higher compared with early October, with an amnesty program for the repatriation of illegal funds abroad helping the Brazilian real sustain some of the stronger gains this year among emerging currencies.

The median forecast of 24 strategists for the Mexican peso in a year projected the currency at 18.53 per dollar, up 2 percent from Monday's close.

However the currency will be prone to sharp swings as the U.S. election draws nearer.

Nine strategists who replied to an extra question on the peso outlook in the weeks following the election projected the currency to strengthen to 18.10 per dollar if Clinton wins or weaken to 21.50 per dollar if Trump wins, according to median forecasts.

The range of estimates was particularly broad for the "Trump wins" scenario, with one strategist forecasting the currency reaching 25 per dollar, more than 20 percent weaker than its current record low of 19.92 per dollar hit in September.

Read the rest at Street Insider

Related: Mexico Prepares Contingency Plan for U.S. Election, Says Central Bank Governor Agustin Carstens (Reuters)

Related: Mexican FinMin Says Peso Intervention Does Not Make Sense (MarketPulse)

Related: How U.S. Election May Impact Factories in Mexico (WSJ.com)

Related: Brokers Crack Down on Risky Trades Ahead of Elections (CNNMoney)

Related: Mexico’s Banks Upbeat Despite Domestic and Foreign Volatility (The Banker)

We invite you to add your charity or supporting organizations' news stories and coming events to PVAngels so we can share them with the world. Do it now!