Falling Mexican Peso Reflects Impact Of NAFTA Talks
Mexico’s peso dropped to its lowest value of the year this week, reflecting investors’ anxiety over ongoing negotiations over the North American Free Trade Agreement (NAFTA).
Currency traders and markets are focusing on the trade talks — which the United States, Mexico and Canada have said they would like to wrap by next week — and considering the impact they may have on Mexico’s economy, said Juan Carlos Orozco, an analyst with Mexico City’s Grupo Reforma.
About 80 percent of Mexico’s exports go north of the border, and anything that could make that trade more difficult could hurt the country’s gross domestic product and the value of its currency, Orozco said.
That’s good news for American importers of Mexican goods and American tourists traveling south. But that’s not so good for American cities across the border region that cater to Mexican tourists.
According to one estimate, Mexican tourists spend more than $2 billion in Arizona every year.