Dollar Jumps Against Mexican Peso AfterTrump Tweet
The U.S. dollar jumped against the Mexican peso on Thursday after President Donald Trump sent Twitter messages that cast new doubt on the relationship between the U.S. and Mexico.
The climb pares a rally in the currency in recent days, when the peso had managed not to weaken in the previous session even after Mr. Trump issued executive orders that included building a wall along the U.S.-Mexico border.
One dollar bought 21.16 pesos on Thursday morning, up 0.4% on the day.
The currency moves on Thursday suggest, "a capricious relationship between the U.S. and Mexico," said Shaun Osborne, chief foreign-exchange strategist at Scotiabank.
Analysts say that over the last year, the peso has become a proxy for investors to bet on the Trump administration's protectionist policies. During the campaign cycle, the peso tended to weaken as Mr. Trump's standings in the polls improved.
The currency sank after Mr. Trump won, and has continued to fall as the president spoke of renegotiating trade agreements and protecting the southern border of the U.S., policies that threaten to negatively impact on the Mexican economy.
“A nation without borders is not a nation,” Mr. Trump said during a visit Wednesday to the Department of Homeland Security. “Beginning today, the United States of America gets back control of its borders.”
Mexican President Peña Nieto was reportedly considering canceling a trip to Washington in response. Still, the tone of the Wednesday announcement sounded more conciliatory than expected, analysts said.
The tweets on Thursday morning, however, reset expectations for the relationship between the two countries, suggesting the relationship was still "fractious," Mr. Osborne said. That pushed the peso lower.
"If Mexico is unwilling to pay for the badly needed wall, then it would be better to cancel the upcoming meeting," Mr. Trump said.
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