Artículo publicado en el Washington Post

Who won the U.S. presidential debate? Watch the Mexican peso

By Joshua Partlow and William Marsden

MEXICO CITY — During the first 40 minutes of the U.S. presidential debate, a period the pundits on CNN would describe as Donald Trump’s finest, another closely watched arbiter of the event was signaling that Trump was having a good night: the Mexican peso.

As Trump started off talking about all the “bad hombres” he wanted to deport, the peso was losing value, as it has done regularly in this election season when Trump ticks up in the polls or shows a glimmer of winning. But an hour after the event was over, the currency had rallied, ending up stronger than when it started and all but crowning Hillary Clinton the victor.

For the betting man, the currency of Mexico has become a favorite proxy for the U.S. presidential race, tracked on the front pages of Mexican newspapers and analyzed endlessly in the financial media. Over the past year, the peso’s value has plummeted to historic lows against the dollar. It has been lost on no one that this period also coincided with Trump’s rise. The peso has risen in the past month as Clinton has gained in the polls.

“It’s undeniable that he affects the exchange rate,” said Valeria Moy, an economist and director of the think tank México Cómo Vamos. “Trump generates a lot of fear in Mexico because he could put our macroeconomic stability in danger. We live from trade.”

The financial impact of the U.S. campaign goes beyond Mexico. Canada’s currency usually tracks the ups and downs of the price of oil, one of its major exports. But Trump’s promise to either renegotiate NAFTA or yank the United States out of the trade pact is viewed as a threat to the Canadian economy and has hurt the Canadian dollar even as the price of oil has risen.

Greg Anderson, global head of currency strategy at Bank of Montreal’s Capital Markets, calls this the “Trump Premium.”

Perhaps nowhere is the premium more significant than in Mexico.

When the Republican presidential candidate launched his campaign in June 2015, the value of the peso stood at about 15 to one U.S. dollar. In the ensuing months, as he outlined his plans, many Mexicans began to view him as a genuine economic concern.

Trump has threatened to block remittances from migrants, punish U.S.manufacturers who move jobs to Mexico and scrap NAFTA, which has boosted Mexico’s export economy and attracted foreign investment.

“The markets are a financial thermometer, and in that way, it’s understandable that the peso should lose value,” said Jaime Zabludovsky Kuper, president of the Mexican Council on International Relations. “The possibility of a Trump victory arouses great worry in Mexico. But it should worry the United States first, because the United States will suffer the principal damage.”

Economists note that the value of any currency is guided by a complex mix of factors, and Trump’s campaign is only one of them. Low oil prices have hurt Mexico, a major petroleum producer, as has the economic turbulence surrounding the Brexit vote in Britain and the possibility of an increase in U.S. interest rates.

But experts note that the peso has performed worse than other emerging market economies, even though Mexico’s economic growth is expected to be at least 2 percent this year and oil prices have recovered somewhat.

“There are two situations that are affecting the Mexican peso: One, yes, is Trump, and the other are the public finances of Mexico,” said Luis Rubio, the president of the Center of Research for Development, a think tank in Mexico. “Whatever event that could create disorder has a negative effect on the peso.”

Over the summer, Mexicans started noticing that when Trump clinched the nomination, or ticked up in the polls, the peso weakened. After Hillary Clinton fell ill and left a 9/11 memorial service in New York, generating speculation about her health, the peso took a nosedive before recovering on positive economic news. Later that month, the peso tumbled to its lowest level ever against the dollar, at nearly 20 to 1.

The peso’s fortunes turned during the first Clinton-Trump debate, on Sept. 26. Clinton was widely viewed as the winner, and the next day, the peso was up.

As Trump has fallen recently in the polls, after allegations of sexual assault, the peso has recovered a bit and now stands at about 18.5 to the U.S. dollar.

On the morning after the latest debate, Mexican currency traders said that the peso’s extreme volatility might be subsiding.

“It seems that the markets were saying that in this third debate, Trump had to show something different, he had to show himself as more presidential,” said Carlos Gonzalez Tabares, director of analysis and market strategy at the bank Monex Grupo Financiero. “At the end of the day, this didn’t happen, and the markets are acting favorably” toward the peso.

“I think in the coming days, we’ll be seeing an additional appreciation,” he added.

Currency experts estimate that the peso could take another sharp fall, tumbling into the range of 21 to 29 pesos to the dollar if Trump pulls off a surprise win.

“There is a very small risk [of such a drop], but the risk exists,” said Javier Bernal Stoopen, managing director of fixed income and institutional sales at Monex.

In Canada, Trump’s pledge to renegotiate NAFTA has unnerved investors. More than 75 percent of Canada’s exports go to its southern neighbor.

But Anderson, the currency strategist, said that Trump’s recent decline in the polls has alleviated many of the concerns.

“The movement of his probability of victory between 25 percent and 12 percent probably doesn’t matter much,” he said. “We’ve already traversed that territory, and the impact on USDCAD [U.S./Canadian dollar conversions] probably has already happened.”

Indeed, traders awoke early Thursday giving barely a winking nod to the debate. Despite early polls showing that Clinton won the debate, the Canadian dollar opened Thursday morning down 0.16 cents from the Wednesday close of 76.02 U.S. cents.

Polls have indicated that while Canadians may be ambivalent about NAFTA’s overall benefits, only 9 percent want it scrapped.

Gordon Laxer, a founding director of the Parkland Institute, a think tank at the University of Alberta, recently warned in a report that U.S. protectionism won’t stop with Trump.

“Whoever wins November’s presidential election, Washington will likely push to renegotiate NAFTA or even scrap it,” he said. “Populist pressures from ordinary Americans feeling the pain of globalization and deindustrialization demand it.”

Marsden reported from Montreal. Gabriela Martinez in Mexico City contributed to this report.