Mexican Peso Dragged Lower as Oil Falls on Trump’s OPEC Comments

The Mexican peso fell on Thursday on the back of oil losses that were triggered by comments from US President Donald Trump. Oil fell after Trump targeted the Organization of the Petroleum Exporting Countries (OPEC) for not doing enough to keep crude prices low.

This comes ahead of the organization’s meeting in Algeria with other major producers. The production cut agreement has been the most important factor in the stabilization of crude prices since the 2014 drop. Supply disruptions have kept prices in current ranges even as the OPEC and partners such as Russia will be discussing ramping up production.

Mexico joined the efforts led by Saudi Arabia and Russia to stabilize the oil market by curbing production. The tweet by President Trump indirectly affects OPEC’s partners like Mexico and Russia.

NAFTA talks continue today between the US and Canada with both sides remain optimistic but an agreement does not seem to be in the cards in the short term. Canada is facing pressure from the US and Mexico as both have political timelines that have to be met to insure a quick approval. Canadian Foreign Affairs Minister Chrysta Freeland remains committed to get the best deal for Canada and after 13 months of negotiation will not compromise for the sake of a quick deal.

NAFTA hopes are keeping the peso immune from emerging market contagion, but as US-Canada negotiations drag on, that protection will begin to wear off.