Following the move by the Trump administration to begin planning to erect a security wall along the US-Mexico border in an effort to secure the border, heightened rhetoric of who would pay for the wall has caused a deep rift between the two nations.
After originally planning to meet Trump in Washington on Tuesday, Mexican President Pena Nieto has since canceled the gathering amid the revelations that the US government may present a border tax to pay for the construction. Although still unconfirmed, the Trump administration is allegedly considering a 20.00% tax in a move that may completely sink the NAFTA agreement.
Considering Mexico has the most to lose from any renegotiation or elimination of NAFTA and none of the leverage, the Peso may find itself under renewed pressure over the medium-term as trade relations sour further, with the USDMXN pair once again trending towards record highs.
Peso Slumps on Growing Trade Tension
Daily Analysis - 27/01/2017