How’s Trump Doing? Look at the Mexican Peso.
When Trump does well, the peso goes down. When he does poorly, it goes up.
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.
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