A peaceful election has calmed fears among investors, says a Banco Base executive, who estimates that the exchange rate will continue to range between 19.70 and 20.30 pesos per U.S. dollar in the coming days.
A tranquil market followed Mexico’s presidential election, which was decisive enough to silence losing candidates who might have contested results, said Gabriela Siller, Banco Base’s director of economic and financial analysis.
“…the vote was free and fair, and (the winner’s) establishment rivals quickly and gracefully conceded defeat,” remarked the Washington Post in an editorial.
The exchange rate had remained relatively stable, at around 19.91 pesos per dollar. On election day, the peso fell to 19.76.
Andrés Manuel López Obrador garnered more than half of the vote on Sunday, and the second- and third-strongest candidates, José Antonio Meade and Ricardo Anaya, have conceded the race.
“Somehow they give the market peace of mind that there will be no confrontation between the different candidates. Probably the exchange rate is also declining because exit polls continue to show the trend of the polls before the election,” Siller added in statements after exit polls were released.
Banco Base estimated that the peso against the dollar can range between 19.70 and 20.30 pesos per dollar after the elections, depending on what López Obrador says in relation to Mexico’s public finances and its trading relationship with the United States.
He recalled that after the last three presidential elections, the exchange rate appreciated 2.82 percent. But the exchange rate now depends much more on external events, “and we know that Donald Trump will keep tweeting” protectionist rhetoric. Talk about a tariff on car imports is especially worrying, said Siller.