Mexican Peso Jumps After Lopez Obrador’s Conversation With Trump

Marcus Newton
July 5, 2018

Another place that's felt the cold wind of President Trump's threatened trade wars is the US's neighbour, Mexico. He said he would seek to stay in a version of the North American Free Trade Agreement (Nafta) that was good for Mexico. Much of the popular ire has been aimed at unpopular President Enrique Pena Nieto's Institutional Revolutionary Party, whose market-oriented economic reforms have yet to benefit many Mexicans.

"This is the institution of the presidency of the republic, this isn't just one person", a journalist said, asking Lopez Obrador if he would change his strategy.

"We are not going to fight". Sound familiar? As president, he may well be, at least in terms of temperament, the Trump of south of the border.

Mexico's business and political elite, who fiercely opposed Lopez Obrador's populist candidacy, have pledged to support his presidency, while the largely orderly vote in which his rivals conceded defeat quickly and gracefully is being hailed as a win for democracy.

The survey by El Financiero showed Lopez Obrador with 49 percent of the vote.

Obrador, 64, former mayor of Mexico City, won by a landslide on July 1, dealing a crushing blow to establishment parties.

"I see that the results [of the voting] are favorable for Lopez Obrador".

The next president is unlike most of his predecessors in many ways: Devoutly religious, he is a career activist instead of a lawyer, military officer or businessman, and the first president in a century to speak in a marked regional accent, from his native Tabasco state in Mexico's tropical lowlands.

Lopez Obrador's coalition is also within striking distance of a congressional majority - a coup for a party contesting its first national elections.

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He said the 2019 budget will include increasing pensions for the elderly and funds for his other campaign promises.

Amid widespread frustrations with the status quo, all of the candidates have tried to paint themselves as the agent of real change. In the event that President Trump continues his harmful and hurtful rhetoric and policies against Mexico and Mexicans, AMLO will have no choice but to take a strong stance.

Furious at spiraling corruption and violence, Mexican voters unleashed a political natural disaster Sunday by electing a leftist firebrand as president and giving him a broad mandate to overthrow the political establishment and govern for the poor.

Last year, Mexico recorded more homicides than at any point in its modern history, and it is on track to break that record this year.

"We can bring a voice to the poor and marginalized, we can bring change, we can win".

The American Action Forum found in a report on December 11 that outright withdrawal from NAFTA would cost United States consumers and businesses up to $7 billion annually in increased prices, and could also jeopardize 14 million jobs and threaten almost $1 trillion in North American trade.

Carlos Cardenas, head of Latin America country risk calls it "unlikely" that Lopez Obrador would "conduct a wave of expropriations/nationalisations across all economic sectors".

The peso declined as much as 1.3 percent after results of the Sunday elections signaled his Morena party was set to enjoy broad support in Congress.

But the main question in the new era of AMLO and his party, Morena, will be whether Mexico-U.S. border security and anti-narcotics cooperation will maintain the close cooperation established over the past 12 years. He further assured, "We're gonna have them taken care of".

Other reports by MaliBehiribAe

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