- The peso dropped more than 1% versus the dollar on Wednesday.
- It had previously been paring losses on hope for an early NAFTA deal.
- Follow the Mexican peso in real time here.
The Mexican peso dropped more than 1% early Wednesday on the back of uncertainty surrounding the NAFTA deal and as the Mexico’s presidential race heats up.
The peso was down about 1.25% against the dollar at 8:22 a.m. ET. It had been been paring losses Tuesday after President Donald Trump said at a cabinet meeting he could reach a deal with Mexico on the North American Free Trade Agreement “very quickly.”
But earlier this week Trump linked a NAFTA deal to immigration issues – centered around a group of about 1,200 Central American migrants in search of asylum – which could be dampening hope for an early deal. About half of the group arrived at the US-Mexico border on Tuesday.
“Mexico, whose laws on immigration are very tough, must stop people from going through Mexico and into the U.S.,”Trump tweeted. “We may make this a condition of the new NAFTA Agreement. Our Country cannot accept what is happening!”
Still, trade officials are reportedly pressing for an early deal to avoid running negotiations into Mexico’s July 1 presidential election, which has also roiled the peso in recent weeks.
The peso has dropped about 5.5% since last Monday, when a poll showed leftist candidate Andres Manuel Lopez Obrador widening his lead in the race.
The presidential hopeful wants to increase social spending and eliminate foreign participation in Mexico’s energy sector. He has also taken hits at President Donald Trump and could ratchet up tensions between the US and Mexico if elected.
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.