Mexico currency weakens as Trump concerns climb

Mexico’s currency is weakening as concerns that Donald Trump could be elected President of the United States are getting stronger.

The Mexican President Enrique Pena Nieto has said that Trump’s rising political prominence is partly to blame for the peso’s drop to 20 pesos to the dollar. His comments arrive after the President met with the POTUS hopeful, a meeting that proved controversial among citizens at home as well as on the wider world stage.

Mexico’s currency is also being impacted by falling oil prices and the US Federal Reserve’s ongoing caution surrounding raising rates, but Nieto highlighted the uncertainty about what would happen if Trump were to win the election as a major factor. Indeed, the country has featured heavily in Trump’s campaign, with his now infamous threats to build a large wall across the border between the two countries.

Since his campaign to succeed Barack Obama began, The Telegraph reports that the peso has dropped by almost 30 per cent, from around 16.5 pesos to the dollar a year ago to 19.6 pesos today. The peso hit a record low earlier this month, as polls suggests that Trump is performing well against rival Hillary Clinton.

“There is a definite correlation,” Ihab Salib, head of international fixed income at Federated Investors, tells the newspaper.

The weakening currency, though, is not necessarily bad news for those looking to buy property that is being sold in its native denomination. Indeed, Mexico is a destination on the up among overseas real estate buyers, with brokerage Snell Real Estate teaming up with Platinum Luxury Auctions last year to reach more international buyers. Earlier this year, World Property Journal highlighted the country’s positive property outlook, with Mexico’s GDP is forecast to grow between 3 and 4 per cent in 2016 and 2017.

Paladin COO Fred Gortner said: “Despite moderating growth, Latin America offers an attractive defensive investment approach to target opportunistic returns with excellent visibility, considerable scale, and project-level economics that are far superior than the rest of the world, namely high profit margins and very low leverage. The real estate outlook for Mexico and the Andean region is quite strong, supported by steady GDP growth, favorable demographics and huge pent-up demand.”

In August 2016, Mexico was the 15th most popular destination among visitors to TheMoveChannel.com. One of the main opportunities attracting global interest is Acanto Hotel in Playa del Carmen, Mexico, which offers large condo streets near the ocean with perahson usage and rental yield up to 8 per cent net. For more information, click here.

 

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