LONDON (Reuters) – Mexico’s peso sank to its weakest level in over two years on Wednesday, as markets braced for a win for Donald Trump the U.S. election, extending a streak of volatility and weakness for the emerging markets bellwether.
The peso dropped as low as 20.8038 per dollar for the first time since August 2022, more than 3% weaker than its previous close – the biggest such tumble since Mexico’s election in summer roiled domestic assets. While emerging market currencies suffered broadly against a soaring dollar, the peso chalked up some of the biggest losses.
“The Mexican peso has been hit hard,” said Chris Turner, global head of markets at ING. “High volatility is also undermining the carry trade and it’s hard to rule out a move to 22.00 over coming weeks.”
After Trump’s 2016 presidential victory, the peso plummeted around 8.5% on the dollar to a then-historic low.
The U.S. currency’s climb began after very early indications of a Republican win in Georgia and continued to gathered pace, with the hitting a four-month peak.
Markets had been fretting that the United States’ southern neighbour could face trade barriers under a possible Trump presidency.
Turner…
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