Mexico’s relationship with the US may be on a rocky footing, but this isn’t the country’s first rodeo
Peso fundamentals are relatively supportive: the economy is growing at a solid clip, inflation remains well-contained, fiscal and current account deficits look manageable, and the central bank’s policy rate remains well above its US equivalent. Political uncertainty is falling after the summer election and this autumn’s judicial reforms. The outlook nonetheless hinges on whether US President Trump follows through on campaign pledges to restrict immigration and apply taxes on products imported from Mexico. Heavy tariffs could inflict serious damage on the country’s export sector, and if migrants are sent home, remittances could plummet, depriving the economy of one of its most...