Currency News: Is The Peso Undervalued?
Currency News
During Trump’s Presidential campaign, many watched as the Peso devalued. Donald Trump’s stance to review trade between Mexico and the United States, caused concern for Mexico. The US is Mexico’s largest trading partner with over 80% of the country’s export destined to the US. NAFTA (North American Free Trade Agreement) gives Mexico favorable trade policies by eliminating numerous tariffs to trade with the US and Canada. Seeking to revitalize America’s economy and address the country’s diminishing manufacturing jobs, Donald Trump issued an executive order to renegotiate the NAFTA agreement. Any changes to the agreement, could have future consequences to Mexico’s economy, which has benefited greatly from the agreement signed on 1994.
However, within the first 100 days in office, Donald Trump’s tone seems to be softening on trade. As a result, some are speculating maybe his policies will not be as detrimental to Mexico’s economy as previously expected. As a result, the Peso has increased in value against the US dollar. During the first quarter of the year, the peso increased from .04823 Pesos to .05343 Pesos. This trend may continue.
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