Mexican Peso Traders Are Learning to Ignore Trump's TweetsBy
Peso briefly sold off on latest tweets, only to gain after
Mexican currency is best performer in EM so far in 2018
Mexican peso traders are learning to quickly move on from U.S. President Donald Trump’s threatening tweets about the border wall and NAFTA.
Trump blasted out the following message on his preferred social media platform on Thursday morning: “The Wall will be paid for, directly or indirectly, or through longer term reimbursement, by Mexico, which has a ridiculous $71 billion dollar trade surplus with the U.S. The $20 billion dollar Wall is ‘peanuts’ compared to what Mexico makes from the U.S. NAFTA is a bad joke!”
The peso selloff was only a blip. It quickly reversed course to reach the highest level in overnight trading. To be sure, most emerging market currencies are gaining against the dollar at this hour, but the peso has been especially sensitive to speculation that the U.S. could pull out of NAFTA.
An hour an a half later Trump followed with “If there is no Wall, there is no Deal!” There was no noticeable market impact.
Trump may have been responding to comments from his Chief of Staff John Kelly and Agriculture Secretary Sonny Perdue indicating that he had “evolved” his outlook on the wall and saw some benefits for U.S. farmers through NAFTA.