NAFTA Uncertainty Hitting MXN

Mexico’s Finance Minister Jose Antonio Meade said on Monday that the peso’s recent depreciation reflects uncertainty about the NAFTA renegotiation process and questions about how quickly the U.S. Federal Reserve will normalize rates.



“The exchange rate reflects different kinds of uncertainties, many of which we cannot control, such as the normalization process of interest rates in the United States,” said Meade, speaking at an event in Mexico City.

“There are other elements which are Mexico-specific. The concern surrounding the (NAFTA) trade agreement,” he added.

The peso MXN=D2 slipped over 1.0 percent against the dollar on Monday to its weakest level since May 18. It has shed about 4.5 percent this month.

The administration of U.S. President Donald Trump, which is demanding significant changes to the North American Free Trade Agreement, has presented a series of hard-line proposals that partners Canada and Mexico say will be tough to accept.

via Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza