Mexican Peso Soars In Response To Trump Tapes Scandal
When it comes to the market, there is one instrument which reveals, perhaps better than any other asset class, Trump’s presidential chances: the Mexican Peso, or MXN. As we reported in mid-September, the Mexican currency plunged to record lows at the same time as Trump’s presidential odds were rapidly rising and even briefly surpassed Hillary’s.
However, following the first presidential debate two weeks ago, the Peso spiked, erasing much of its recent losses. More importantly, market participants were looking at the MXN to see how the market would react to the Trump Tapes scandal. The answer came moments ago when in early trading, the Mexican Peso has soared, and the USDMXN tumbled out of the gate, an indication of Peso strength, and a confirmation that at least for now, the market’s reaction to the Trump Tapes is that his presidential chances have deteriorated substantially.
Specifically, in the premarket, the USD/MXN extended losses ahead of U.S. presidential debate at 9am Monday time in HK/Singapore. Spot was down as much as 1.6% to 18.9967, hitting 18.9883 earlier in session, lowest since Sept. 13 and past 19.00 technical support. As Bloomberg notes, a breach of 19.00 puts 50-DMA at 18.8878, 100-DMA at 18.7462 in sight
The inverted USDMXN chart below shows that as of early trading, Trump’s odds at least as indicated by the Peso, are back to levels seen on September 13 and sliding fast.
Just as interesting is how closely the inverted USDMXN tracks the Clinton-Trump spread, as shown below.
Just like during the first debate, for the best indication of how the market believes the second debate is going, look no further than the Mexican Peso.
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