Déjà vu 2020 of the Mexican peso: Trump in the election campaign

By Abraham Gonzalez MEXICO CITY, Jan. 6 (Reuters) - Mexico's weight is heading toward rough waters in the second half of 2020 as the US presidential election campaign. UU. It is launched and stirred in the currency market, according to analysts. They say that the president of the United States, Donald Trump, could resort to the use of Mexico as a verbal piñata on trade and migration issues to fan his base and improve his chances of reelection. During Trump's successful bid in 2016 to reach the White House, his verbal teasing against Mexico helped turn the peso into the third worst-performing emerging currency against the dollar that year; weakened almost 21%. Some analysts have said that a new regional trade agreement to replace the North American Free Trade Agreement (NAFTA) of 1994 should help introduce investments in Mexico and reduce the volatility of the peso. The revised terms were agreed at the end of last year for the United States-Mexico-Canada Agreement (USMCA) to replace NAFTA after months of disputes to ensure stricter labor standards in Mexico. But some argue that if Trump spoke hard about trade with Mexico, that could still hamper the peso. Although we have the USMCA, we should not think that we are going to avoid the threats of protectionist measures that Trump and his electorate love, said James Salazar, an economist at CI Bank. Elections in the United States will be the main risk factor for the peso, Salazar added. For the moment, however, the issue of Mexico is in the background in Washington, which focuses on Trump's political trial and the murder of an Iranian high general, Qassem Suleimani. The peso ended 2019 with an increase of 3.64%, to 18.9250 per dollar. Most of the profits came at the end of the year, with the 3.26% increase in weight only in December after Mexico, Canada and the United States agreed to the expected changes in the USMCA. While the uncertainty towards the commercial relationship has diminished a bit, we would not rule out more noise against Mexico in immigration or security matters, BBVA said in a note sent to customers. Trump has made immigration law enforcement a primary focus of his first term and has continued to press the issue in the period before the presidential elections. In late May, Trump threatened to apply tariffs on all Mexican exports if President Andrés Manuel López Obrador did not stop the increase in migrants trying to cross the U.S. border from Mexico. López Obrador agreed to send National Guard troops to the northern and southern borders of Mexico to stop the flow. The consensus among economists is that the peso will weaken in 2020, but the question is how much. The peso is seen at 20 per dollar at the end of 2020, according to the median of a central bank survey, with readings ranging between 19.20 and 20.50. That is an average depreciation of almost 6% compared to the end of 2019. (Report by Abraham González; Editing by Anthony Esposito) This story has not been edited by The Times of India and is automatically generated from a syndicated feed to which we subscribe. (This story has not been edited by timesofindia.com and is automatically generated from a syndicated feed to which we subscribe.)