Trump’s Rhetoric May Boost Travel to Mexico

Only time will tell how US president-elect Donald Trump’s policies will affect the daily lives of Americans. What we can see immediately, however, is how his policies are affecting certain aspects of travel.

With Trump’s election, the Mexican peso has been a notable loser. In the past year (after the presidential campaign began in earnest), the dollar gained 20% against the Mexican peso. American traders have been worried over Trump’s aggressive policies toward their neighbor to the south, Yahoo Finance reported. The incoming president has called for an overhaul of the North American Free Trade Agreement and has famously called for building a wall along the US-Mexico border.

The peso dropped 2% on Wednesday, after the Federal Reserve released minutes from its December meeting. The Fed outlined the possible need to increase interest rates if the economy grows rapidly under Trump. According to Reuters, the peso also took a hit after Ford announced plans to cancel the automaker’s $1.6 billion investment in Central Mexico.

“With this Ford announcement, markets are clearly seeing the risk of protectionist measures toward Mexico,” said Juan Carlos Alderete, a strategist at Banorte-IXE.

Tensions are high on the economic front, but the silver lining for American consumers is that a weaker peso means travel to Mexico will be more affordable now.

The value of the Mexican peso has been tumbling against the dollar. In the beginning of 2016, $1 was equal to 17.25 pesos. Today, it fetches over 21 pesos.