In forex circles, the Mexican peso has taken something of a back seat in recent discussions, with the glamor currencies certainly being the US dollar and the UK pound Sterling, which have experienced serious volatility in the wake of Brexit and Trump presidency developments.
The Mexican Peso
However, a lot of the concern around President Trump’s plans does concern Mexico. He has implemented some strongly protectionist policies that will be of concern to any foreign countries interested in trading with the US, and when it comes to Mexico, he is concerned with paying for ‘the wall’ and making Mexico itself financially accountable for that enterprise. Increasing import taxes for goods purchased in the USA from Mexico has been his approach, and it has been discussed that, realistically, Mexico will be on the end of just about the worst trade deal in history.
A Cheap Currency
This is a problem for the Mexican Peso, as obviously, being on the bad end of a deal with the US is never going to bode well for a neighboring country, and it has been clear from the outset of the Trump presidency that civil relations with Mexico were never going to be something the President was interested in establishing or maintaining. This has led to forex speculators referring to the Mexican peso as an unusually cheap currency. The peso has actually strengthened somewhat since Trump’s initial election, going up by as much as 7% from last year’s lows, however, it still looks to represent exceptional value on the market.
In a time when the currencies that are getting the most action and attention are definitely the US dollar, UK pound and Euro, it can be easy to overlook the Mexican peso in your forex dealings, however, for the kind of people interested in the performance of currencies and considering an active trader download to help them manage their trading, it is a currency worth looking at. The Mexican peso will be affected by just about everything that happens in the US in terms of financial policy, and that makes it very much worth watching. It may also turn out to be a pretty good bargain if you scoop it up at the cheaper points.
What to Expect
It is hard to say how Mexico’s government and people will retaliate to the clearly anti-Mexican position of Trump, and it has been highly publicized that Mexico has no interest in paying for his ambitious border wall, through taxation or by any other means. For investors, it is hard to say whether the Mexican Peso will remain unstable throughout these unclear times during the early days of Trump’s watch, or rally in response to anti-Trump sentiments in other places like South America and Canada.
However, if you do expect the peso to weather the storm, as many do, it is one of the best currencies to try and invest in at the moment. Losses are still possible, but this currency is a very good value right now.