As the US presidential election draws near, the Mexican Peso (MXN) is experiencing fluctuations, trading within a narrow range as traders anticipate the impact of the election results on the currency. The USD/MXN pair has shown little movement as market participants remain cautious, awaiting definitive news that could drive the Peso’s direction in the coming days.
A Tense Awaiting
The Mexican Peso’s performance is closely tied to the outcome of the election, with the potential for significant volatility depending on who emerges victorious. According to financial analysis from El Financiero, if Democratic nominee Kamala Harris wins, the Peso is likely to benefit, primarily due to her administration’s more favorable trade policies. Conversely, a victory for Republican nominee Donald Trump could lead to adverse effects on the Peso, given his past threats to impose tariffs on Mexican imports. Such tariffs would put downward pressure on the Peso as market sentiment shifts in anticipation of increased trade tensions.
Current Market Sentiment
As of now, the election forecaster 538.com estimates a 50% chance of Vice President Harris winning and a 49% chance for Trump, with just a 1% likelihood of no clear winner emerging. The close race has kept traders on edge, and recent polling trends have shown Harris gaining ground, which could explain the slight strengthening of the Peso against the US Dollar over the last 24 hours.
Also read : EUR/USD Surges Past 1.0900 As Weak Dollar And U.S. Election Volatility Shake Markets
Technical Analysis
Technically, the USD/MXN pair continues to trade below the gap formed when it broke lower earlier this week. This suggests a cautious market environment where traders are weighing potential outcomes carefully. The exchange rate is projected to fluctuate between 18.30 and 22.26, depending on the election results, creating a landscape ripe for both opportunities and risks.
