FxWirePro: Mexican Peso whipsaws on Trump comments

The Mexican peso reached its weakest point since mid-March after President Trump’s commerce secretary Wilbur Ross said that the United States is imposing duties ranging from 3-24 percent on five Canadian companies that export lumber to the United States. The commerce secretary highlighted that Canada has been subsidizing the sector that amounts to exports worth 45 billion. Canadian firms have 31.5 percent share in the US lumber market. It reminded investors of the real risk to Mexico from the Trump administration’s determination to balance the trade deficits. The peso traded as low as 19.29 per dollar, compared to 18.47 per dollar just two weeks ago.

However, the peso found a boost from separate news also involving the Trump administration. President Trump announced that after talking to the Canadian Prime Minister Justin Trudeau and the Mexican President Enrique Pena Nieto, the three have agreed to not to terminate the North American Free Trade Agreement (NAFTA) but renegotiate it and make it up to date. As the news broke out, the peso is up more than a percent today, and currently trading at 18.97 per dollar.