The Cable

The Cable goes inside the foreign policy machine, from Foggy Bottom to Turtle Bay, the White House to Embassy Row.

How’s Trump Doing? Look at the Mexican Peso.

When Trump does well, the peso goes down. When he does poorly, it goes up.

gettyimages-482394810
gettyimages-482394810

The Republican presidential nominee Donald Trump has a lot to say about Mexicans; in his view, they’re rapists and drug dealers who bring crime into the United States. As it turns out, a powerful Mexican indicator has something to say about Trump: the peso.

For months, the Mexican currency has endured an inverse relationship with the businessman. When he’s doing well, or his Democratic challenger Hillary Clinton is doing poorly, the value of the peso drops. When he’s doing poorly, its value goes back up. In other words, markets believe a Trump victory would be bad for Mexico. A Clinton victory would be a good thing.

Check out the chart below. It tracks the peso’s value against the dollar since March. Be sure to note the dips.

The Republican presidential nominee Donald Trump has a lot to say about Mexicans; in his view, they’re rapists and drug dealers who bring crime into the United States. As it turns out, a powerful Mexican indicator has something to say about Trump: the peso.

For months, the Mexican currency has endured an inverse relationship with the businessman. When he’s doing well, or his Democratic challenger Hillary Clinton is doing poorly, the value of the peso drops. When he’s doing poorly, its value goes back up. In other words, markets believe a Trump victory would be bad for Mexico. A Clinton victory would be a good thing.

Check out the chart below. It tracks the peso’s value against the dollar since March. Be sure to note the dips.

Many of the dips coincide with positive moments for Trump, or negative ones for Clinton. For instance, in March, as Trump emerged as the likely nominee, the value of the peso plummeted. In May, when Sen. Ted Cruz dropped out of the race, it dropped again.

In July, when Trump pulled nearly even in the polls with Clinton after the Republican National Convention, the peso took another plunge. And on Monday, a day after Clinton admitted she was ill with pneumonia, the Mexican currency dropped again.

The good news for Clinton supporters is that the value of the peso has steadily increased for months. This is a sign of confidence in Clinton’s ability to pull off the win in November.

However, if Trump manages a comeback, Mexicans could be in trouble. If the trend holds, the peso would nose dive. And that would make paying for the border wall Trump promises Mexico will build a whole lot more expensive.

Photo credit: MARIA CALLS/Getty Images

More from Foreign Policy

A Panzerhaubitze 2000 tank howitzer fires during a mission in Ukraine’s Donetsk region.
A Panzerhaubitze 2000 tank howitzer fires during a mission in Ukraine’s Donetsk region.

Lessons for the Next War

Twelve experts weigh in on how to prevent, deter, and—if necessary—fight the next conflict.

An illustration showing a torn Russian flag and Russian President Vladimir Putin.
An illustration showing a torn Russian flag and Russian President Vladimir Putin.

It’s High Time to Prepare for Russia’s Collapse

Not planning for the possibility of disintegration betrays a dangerous lack of imagination.

An unexploded tail section of a cluster bomb is seen in Ukraine.
An unexploded tail section of a cluster bomb is seen in Ukraine.

Turkey Is Sending Cold War-Era Cluster Bombs to Ukraine

The artillery-fired cluster munitions could be lethal to Russian troops—and Ukrainian civilians.

A joint session of Congress meets to count the Electoral College vote from the 2008 presidential election the House Chamber in the U.S. Capitol  January 8, 2009 in Washington.
A joint session of Congress meets to count the Electoral College vote from the 2008 presidential election the House Chamber in the U.S. Capitol January 8, 2009 in Washington.

Congrats, You’re a Member of Congress. Now Listen Up.

Some brief foreign-policy advice for the newest members of the U.S. legislature.