Financial expert and collaborator for the Financial Times Roger Blitz, says the Mexican peso’s stellar run has been hit hard by Nafta fears.
The Mexican peso has been the most notable casualty of investor concern that Donald Trump’s uncompromising stance on the North American Free Trade Agreement will ultimately lead to its break-up, hurting the economies of its closest neighbours. After rallying for much of 2017, the peso has tumbled more than 7 per cent against the dollar over the past month, making it the worst-performing emerging market currency over the period.
The fourth of seven rounds of talks on renegotiating Nafta, a landmark free-trade deal between the US, Mexico and Canada that came into effect in 1994, has been particularly harsh on the peso in recent days. On Tuesday, the peso was again volatile, falling as much as 0.5 per cent to 19.12 against the US dollar before recovering.
The Canadian dollar, or loonie as it is known, was little changed at C$1.2557. US proposals, including a “sunset” agreement that would require Nafta to be renegotiated every five years, have been greeted with alarm by Canadian and Mexican officials and viewed as unworkable by observers, raising the risk of the talks collapsing.
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Source: https://www.ft.com/stream/4c632b1d-3d26-3d54-8dab-d1a91236fc2d