Frustrated by the contradictory assessments of the presidential race heading into this final terrifying week? Consider the peso.
As the Los Angeles Times puts it, the Mexican currency “has become an indirect proxy among investors for Trump’s chances at the White House.” When Trump, whose policies on immigration and trade are viewed as potentially disastrous for the Mexican economy, was knocked on his heels by the release of the Access Hollywood tape on Oct. 7, the peso jumped 2.2 percent to a one-month high against the dollar. It posted big gains again after Trump’s poor performance in the final presidential debate on Oct. 13, but as Bloomberg’s Joe Weisenthal notes, it has been steadily reversing its gains since then. It dropped dramatically on Oct. 30 when FBI Director James Comey sent his letter to Congress about continuing to investigate Hillary Clinton’s email. And dropped again this week as Trump continued to creep up in polls.
In encouraging news for those of us on both sides of the border who would rather not have a big, beautiful wall come between us, the peso was up 1.1 percent Thursday, with polls showing Clinton mostly holding her lead.
The peso may be a leading indicator, fluctuating more dramatically based on U.S. election news, but it’s not alone. (Granted, this is just one of many factors driving markets right now, including the peso.) The price of gold, which tends to go up when investors are worried about global instability, also eased during the debates. Global equity prices and the dollar itself fell earlier this week along with Trump’s improving numbers. Stocks fell for eight consecutive days through Thursday, the longest decline since the 2008 financial crisis. Trump may tout his business acumen, but investors really don’t want him in office.
In case you were wondering, the ruble doesn’t appear to have gained during Trump’s good week or fallen during his bad ones. Whatever Trump’s relationship with the Kremlin, investors don’t seem to be expecting the struggling Russian economy to get a windfall from his presidency.
