Trump and the peso

Joshua Keating has a Slate article about Trump's impact on, of all things, the peso:

A man “takes energy” with a Mexican peso bill on the top of the Sun Pyramid in Teotihuacan, Mexico

during the spring equinox on 21 March 2006.

As The Los Angeles Times puts it, the Mexican currency “has become an indirect proxy among investors for Trump's chances for the White House”. When Trump, whose policies on immigration and trade are viewed as potentially disastrous for the Mexican economy, was knocked on his heels by the release of the Access Hollywood tape on 7 October 2016, the peso jumped 2.2 percent to a one-month high against the dollar. It posted big gains again after Trump’s poor performance in the final presidential debate on 13 October 2016 but, as Bloomberg’s Joe Weisenthal notes, it has been steadily reversing its gains since then. It dropped dramatically on 30 October 2016 when FBI Director James Comey sent his letter to Congress about continuing to investigate Clinton’s email, and dropped again this week as Trump continued to creep up in polls.
In encouraging news for those of us on both sides of the border who would rather not have a big, beautiful wall come between us, the peso was up more than a percent on Thursday, with polls showing Clinton mostly holding her lead.
The peso may be a leading indicator, fluctuating more dramatically based on US election news, but it’s not alone. (Granted, this is just one of many factors driving markets right now, including the peso.) The price of gold, which tends to go up when investors are worried about global instability, also eased during the debates. Global equity prices and the dollar itself fell earlier this week along with Trump’s improving numbers. Stocks fell for eight consecutive days through Thursday, the longest decline since the 2008 financial crisis. Trump may tout his business acumen, but investors really don’t want him in office.
In case you were wondering, the ruble doesn’t appear to have gained during Trump’s good week or fallen during his bad ones. Whatever Trump’s relationship with the Kremlin, investors don’t seem to be expecting the struggling Russian economy to get a windfall from his presidency.

Rico says politics makes for strange money behavior, too, it seems...