Oct. 10 (Dow Jones) -- The Mexican peso rallied to its strongest level in a month after Republican presidential candidate Donald Trump stumbled in his bid for the White House following the release of a video in which he made lewd comments about women.
The video, which led key Republicans to withdraw their support for the candidate, prompted peso gains ahead of Sunday night's second presidential debate between Mr. Trump and Democratic candidate Hillary Clinton.
The peso held those gains when local markets opened Monday, and was quoted in Mexico City in early afternoon at 18.8920 to the U.S. dollar, according to Infosel, compared with 19.2845 late Friday.
The currency had also rallied after the first debate in which Mrs. Clinton was widely seen as coming out on top.
Although Mr. Trump's performance Sunday was seen as an improvement over the first debate, the video showing comments from 2005 in which he talked of groping and kissing women had an impact on his poll numbers.
A survey by The Wall Street Journal and NBC News at the weekend gave Mrs. Clinton an 11-point lead over Mr. Trump on a ballot that included third-party candidates, compared with a 6-point lead in September. The poll was taken before the debate in which Mr. Trump apologized for the comments, which he said were "locker room talk," and denied that he actually did what he had said.
A Trump victory in the November election is seen as a potential disaster for Mexico, given the candidate's plans to renegotiate or abandon the North American Free Trade Agreement, his threats to build a wall along the U.S.-Mexico border and find ways to make Mexico pay for it, and plans to charge tariffs on goods made in Mexico.
The peso has gained more than 5% since reaching an all-time low around 19.93 to the dollar ahead of the first U.S. debate.
A recent rise in oil prices and the Bank of Mexico's half-percentage point increase in interest rates on Sept. 29 have supported peso gains, but the key factor is Mrs. Clinton's advance against Mr. Trump in voter preferences, Grupo Financiero Banorte said in a report.
While there is wide agreement the peso would weaken sharply in the event of a Trump election victory, potential gains in the wake of a Clinton victory aren't as clear.
"There are doubts about Mexico's fiscal position and current account, and how the current account is financed," said Benito Berber, a Latin America strategist at Nomura.
Other concerns include the finances of state oil company Petroleos Mexicanos, which has seen production fall and had to cut investment because of lower oil prices, and the prospects the U.S. Federal Reserve will raise interest rates by year-end.
In an online survey last week by Nomura, which included 165 responses from hedge funds, pension and mutual funds, banks and others, almost 40% thought the exchange rate would end the year between 22 pesos and 24 pesos to the dollar if Mr. Trump won, while 38% said between 20 and 22 pesos to the dollar.
If Mrs. Clinton won, around 36% saw the peso between 17 and 18 to the dollar by year-end, and 35% between 18 and 19. Only about 17% of respondents said they expected to see the currency under 17 pesos to the dollar.
"Perhaps this suggests that there are other concerns, besides Trump, that could put pressure on the peso and not allow it to appreciate more," Nomura said.
Copyright © 2016, Dow Jones & Company, Inc.
Fecha de publicación: 10/10/2016