The Mexican peso doesn’t like Trump
September 27, 2016, 12:07 pm

The Mexican peso broke through the wall and regained from its worst record this year as Donald Trump was believed to have fared poorly in his face-off with Clinton [Xinhua]

Hours after the first US presidential debate between Democrat Hillary Rodham Clinton and Republican Donald Trump, emerging markets regained from an earlier slump, largely led by the strengthening of the Mexican peso.

Mexican traders were jittery in the days leading up to the presidential debate because they feared a Trump win in the November elections could translate into a retreat of exports to the US.

Trump had pledged during his campaign to renegotiate trade deals with other countries, and many believed that would include Mexico, especially as the Republican hopeful said he would restrict immigration from there to the US and build a southern wall to keep “illegals” out.

But as the night looked increasingly to swing in Clinton’s favor, the Peso rallied against the US dollar in off hours trading.

At press time, with hours to go before markets open in North and Latin America, the peso rose 2.3 per cent against the greenback, signalling that there was consensus Clinton had won the first debate.

Asian markets also appeared to lean in favor of Clinton, keeping in tandem with Wall Street.

The benchmark Shanghai Composite index gained 0.6 per cent after two days of a drastic drop below the 3,000 mark for the first time in more than a month.

Hong Kong’s Hang Seng regained 1.07 per cent to close at 23,571.90.

In South Korea, the Kospi rose 0.77 to 2,062 while Japan’s Nikkei rose 0.84 per cent to close at 16,683.93.

But the presidential debate had no sway over oil prices, which were yet again prey to the ongoing proxy war between Iran and Saudi Arabia.

Although it looked on Monday like OPEC and non-OPEC members could reach an informal deal to cut output – oil prices rose 2.3 per cent – these hopes were dashed when disagreement between the two countries reared its ugly head.

Saudi Arabia on Tuesday ruled out any exception to an oil production quota demanded by Iran. Riyadh said it would abide by a output cap only if Tehran did the same.

Complicating matters is that Iran has just revitalized its oil industry and is pumping more to make up decades of sanctions, while Iraq, Russia and Saudi Arabia are pumping at their highest levels in years.

At press time, the US benchmark West Texas Intermediate fell 1.92 per cent to $45.05; global benchmark Brent Crude fell 2.07 per cent to $46.37.

Meanwhile, other emerging market currencies followed the Mexican peso’s lead. In South Africa, the rand gained against the dollar by 1.18 per cent.

In Brazil, the reais gained against the US dollar by about 0.01 per cent, while the Russian ruble gained 0.51 per cent against the dollar.

The BRICS Post with inputs from Agencies