The dollar surged against Mexico’s peso after Mexico said it will impose a 20 percent tariff on U.S. pork imports.
Tuesday’s slide was triggered by U.S. President Donald Trump’s tariffs on steel and aluminium.
The peso slide was also attributed to Mexico’s retaliatory tariffs on U.S. steel, apples, potatoes, cheeses, bourbon and pork. U.S. pork producers have enjoyed Mexico as their biggest export market.
The greenback was trading at 20.20 pesos per dollar on Tuesday, and 20.32 Wednesday morning. The Canadian dollar was off 0.4 percent, trading at 1.2979 to the U.S. dollar, the lowest since March 21.
This is the most lopsided exchange rate since February 2017.
The U.S. decision to go ahead with the tariffs has complicated NAFTA talks with Mexico and Canada. ING strategists said the latest moves by Mexico might prompt Trump to pull out of NAFTA.
Sources: Reuters, CNBC