Mexico Far Reaching Implications in APAC

Markets in Australia and Japan were positive in early trade after Japan’s inflation data showed improvements and markets stateside clocked new record highs, even as threats of a trade war with Mexico brew.

A social media war of words between Mexican President Enrique Pena Nieto led to a canceled meeting with U.S. President Donald Trump over a border wall and trade relations hit the Mexican peso overnight.

During the Asian session, the peso fell more than 0.5 percent against the greenback at 21.33 after the White House said it might impose a 20 percent tax on goods from Mexico to pay for the wall along the U.S. southern border. The lowest for the peso was when it reached 22.0385 to the dollar on Jan. 11.

“Regionally, it is hard to divorce ourselves from the Mexico storyline. How that plays out could have far-reaching ramifications locally,” said Stephen Innes, senior trade at Oanda, in a note on Friday.

Innes added that “when politics becomes the primary driver behind currency markets, expect confusion to reign.”

CNBC

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Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes