No doubt, the Trump administration has the power to send jitters to markets.
The Lonnie and Mexican peso received a major blow on Wednesday they both dropped sharply after the president’s top pick to become his trade chief made remarks about the renegotiation of the North American Free Trade.
Double Whammy
Normally, the peso is the top loser of Donald Trump remarks on his economic and trade policy but on Wednesday, both the currencies from Canada and Mexico lost their respective grounds against the US dollar after Wilbur Ross, the top choice for commerce secretary on the Trump administration, said that the NAFTA involving the two countries should be systematically reopened.
The Canadian dollar gave up 1.7% to close at 1.3269 per greenback, its largest single-day drop since June last year, while the Mexican peso finished 2% down and was last trading at 21.9544 versus the US dollar, a fresh record low for the currency.
Ross reiterated in his Senate confirmation hearing that the renegotiation of the deal will be the number one priority of the incoming administration as this agreement had yet to be transparently reviewed.
The Lonnie and Mexican peso dived further in yesterday’s session when Federal Reserve Chair Janet Yellen affirmed that more key official are expecting that the central bank will raise key interest rates for few times this year up to 2019.
The peso has been wounded traumatically in the start of 2017, hitting record lows after record lows, as the billionaire tycoon nears in taking the Presidential office.