Peso, analysts' favorite barometer of Trump's success in the presidential race, flew to the 6-week high shortly after yesterday's debate pointing at Clinton's win. However, some analysts say that Mexican currency is simply confused.
After yesterday's intensive debate between Hillary Clinton and Donald Trump, the analysts were waiting for the market to give a sign of who won the last official debate before the big elections day on November 8. But this time, the experts couldn't completely agree whether Mexican peso, the main market indicator of the elections race, was clearly pointing at the winner. In the third and last debate, Trump mentioned his big plans for renegotiation of the North American Free Trade Agreement potentially damaging Mexican economy, what is the main reason why peso is so sensitive to this year's presidential race.
According to MarketWatch's experts, peso was trading at 5.39 cents, after earlier going up to 5.42 cents, which is the highest performance level since September 8. In turn, the dollar-peso ratio reached its lowest level at 18.45 pesos for $1, before settling at 18.56 pesos per $1 later, also the best performance in the past 6 weeks. Immediately after the debate, the currency showed an increase of slightly over 0.4%.
“The Mexican peso flew to a six-week high post the debate. The currency tells us she won the evening,” said Tobias Davis of Western Union International Bank, as reported by MarketWatch.
However, Fortune's experts believe that Mexican peso couldn't give any clear sign this time, as its increase against the American dollar was less than a third of what it showed after the first or second debate. The slight 0.4% climb of peso yesterday night is hardly comparable to the 2% jump of the currency after the first debate. Therefore, it shouldn't be regarded as a clear sign of anything, except for that the yesterday's debate was a "toss-up", they say. Even though the currency is up roughly 7% since the first debate back in September, yesterday's peso performance is too weak to claim that it clearly points at something.
“It does look like Clinton came out on a better footing than Trump. The Mexican peso has been a barometer on how Clinton is doing. I wouldn’t say anything is a foregone conclusion as of now,” an economist Vishnu Varathan told Bloomberg.
Next to that, Asian markets, yet another elections-dependent indicator, demonstrated some mixed performance yesterday night. According to the Fortune's analysts, Chinese Hang Seng Hong Kong (HSI: IND) index slightly improved whereas the Shanghai index slightly declined, showing the uncertainty within the market.
Overall, the fact that Mexican peso has reached its highest level in the last 6 weeks does imply that Clinton's chances to become the next American president are higher than Trump's, yet the currency's behaviour right after yesterday's debate was too sluggish to make any definite conclusions.