The Colombian peso began depreciating in the lead up to the U.S. presidential election and took a big tumble today as markets continue to adjust to Trump’s victory.
While the world’s eyes have been more focused on the damage that the election of Donald Trump has done to the Mexican peso, the Colombian peso has now suffered a delayed hit. The nation’s currency was rocked today as the U.S. dollar strengthened, rising to more than 3,100 pesos to the dollar for the first time since August 3, according to XE.com.
From the beginning of September to mid-October, the peso jumped around between 2,900 and 3,000 to the dollar. The failed plebiscite vote for a peace deal with FARC and the OPEC announcement that it planned to cut oil production both caused short-term spikes and falls, but it still generally stayed within that range.
Then, on October 30, the Colombian peso went above 3,000, and it has been fluctuating drastically ever since, particularly in the days leading up to the U.S. presidential election. But after starting today at right around 3,000 it is now trading over 3,100, hitting a high of 3,117 to the dollar.
Today’s volatility suggests more change to come, with the market uncertainty surrounding the presidency of Republican winner Trump showing no signs of easing in the emerging markets.
Colombian Peso – November 10 Volatility
The Mexican peso has seen even more turmoil. It fell some 13% on the night of the election to an all-time low as it became increasingly clear that that Trump would beat Democratic candidate Hillary Clinton, who was a massive favorite in polls conducted before the vote began. Carlos Slim, the Mexican mogul and one-time world’s richest man, may have lost nearly $5 billion USD overnight, according to Fortune.
The Brazilian real, Chilean peso, and Argentine peso have all fallen against the dollar today as well.
Mexico’s central bank and finance minister held a joint news conference early the following morning. “We will take the necessary measures,” said Jose Antonio Meade, Mexico’s finance minister. “Mexico is in a position of strength.”
President Enrique Peña Nieto offered an olive brand by calling Trump to congratulate him on his victory and invite him to visit the country for a discussion of bilateral relations. He said that the U.S. president-elect accepted the invitation and that they meeting may take place before the inauguration in January.
President Peña Nieto received widespread condemnation in the domestic press earlier this year when he hosted a meeting with Trump despite the then-candidate’s consistently hostile messaging on Mexico. Throughout his campaign, Trump vowed to build a physical wall along the border and force Mexico to pay for it in an effort to curb illegal immigration and increase national security.
Trump has also pledged to revamp — or simply tear up — the North American Free Trade Agreement that has been in force since the early 1990s between the United States, Mexico, and Canada. While campaigning, he laid out a plan for his first 100 days in office that included the following promise. “I will begin taking the following seven actions to protect American workers,” said Trump in a speech. “First, I will announce my intention to renegotiate NAFTA or withdraw from the deal under Article 2205.”
Mexican Foreign Minister Ruiz Massieu said yesterday that the country is willing to talk with Trump and Canadian leaders about making tweaks to NAFTA. But was resolute that Mexico is not interested in a renegotiation of the deal. “We think it is an opportunity to think if we should modernize it, not renegotiate it, but to modernize it,” Massieu told CNN.