The Mexican peso dropped more than 2 percent on Wednesday as reports began to surface of a new Trump executive order that would withdraw the United States from the North American Free Trade Agreement (NAFTA).
An official at the White House said the executive order is currently being reviewed and could be officially announced over the next few days, according to a report by Politico.
There is speculation the executive order may just be a clever tactic employed by Trump to get Mexico and Canada to renegotiate the NAFTA agreement, which the president has previously called “one of the worst trade deals ever made,” but the order may also trigger a specific clause that allows a party to exit NAFTA within six months of providing a written notice.
While the Mexican peso had already lost approximately 2 percent of its value since the start of the week, partly due to Trump’s new Tweets concerning the wall on the border with Mexico, today’s developments sent the peso to its lowest rate against the USD since mid-March.
Don't let the fake media tell you that I have changed my position on the WALL. It will get built and help stop drugs, human trafficking etc.— Donald J. Trump (@realDonaldTrump) April 25, 2017
By 12:45 p.m. EST on Wednesday, the USD/MXN exchange rate climbed from 18.8645 - where it was trading at the start of the day - all the way to 19.29604; a decline of 2.30 percent on the day for the Mexican currency:
News of Trump’s looming NAFTA order also impacted the Canadian dollar, which dropped about 0.5 percent during the overlap of the NY & London currency trading session on Wednesday.
Peso banknote photo by Christian Ramiro González