During the presidential rally, Donald Trump, the President-elect expressed his dissatisfaction regarding trade policies with Mexico. He even suggested building a wall at the American-Mexican border, indicating his bitterness. This directly affected the currency value of Mexican Peso. As soon as the election result was announced, Peso reached a record low. The trend continued until the end of 2016 and it is expected to continue the downward trend even in 2017.
The market believes that Donald Trump will be harsh while dealing with Mexican trade and production. The negative impact of the new administration worries the traders and investors. As a result, Mexican peso decreased in value for the second consecutive day.
Recently, Ford made an announcement that it won’t invest in Mexico. Investors worry that GM would also follow the suit. Prior to the US election, Mexico was on the path of growth as there were expectations that there will be more foreign investment. However, the current situation makes it possible for foreign direct investment to pull back from Mexico without legal implications.
Ford Motor had faced a backlash from Donald Trump as the President-elect accused the manufacturer for taking jobs outside the United States. So, Ford announced that it will cancel production in its $1.6 billion plant in Mexico and it will invest more in Michigan. However, the CEO of Ford stated that the decision was based on the demand forecast in Mexico. Recently on Twitter, GM was attacked by Donald Trump for selling Chevy Cruze made in Mexico to earn profits in the USA.