FOREX-Mexican and Canadian currencies rise, investors feel Clinton won debate

Published 2016-09-27, 06:32 a/m
© Reuters.  FOREX-Mexican and Canadian currencies rise, investors feel Clinton won debate
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* Mexican peso climbs about 2 pct, Canadian dollar rises

* Dollar/yen up from recent 1-month low

* Clinton seen keeping status quo, uncertainty over Trump (Updates throughout, adds fresh quote)

By Anirban Nag

LONDON, Sept 27 (Reuters) - The Mexican peso rose 2 percent on Tuesday after record lows against the U.S. dollar, buoyed by a view that Democratic presidential candidate Hillary Clinton fared better than rival Donald Trump in a television debate.

The peso MXN=D4 was on track for its best daily rise in three weeks, lifting the higher-yielding Canadian dollar CAD= along with it. Canada, like Mexico, has close trade ties with the United States and is part of the North American Free Trade Agreement.

Markets have tended to regard Clinton as someone who is likely to retain the status quo, while few are sure what a Trump presidency might mean for U.S. foreign policy, international trade deals or the domestic economy.

Higher-yielding currencies like the Australian AUD= and New Zealand dollars NZD= also did well, rising 0.3 percent against the U.S. dollar. The safe-haven yen JPY= underperformed.

"The currency market is dominated by risk-on. Not only the currencies of the neighbouring countries Mexico and Canada were able to appreciate notably, but also other conventional risk currencies such as the Aussie, kiwi and the Scandinavian currencies," said Esther Reichelt, currency strategist at Commerzbank (DE:CBKG).

"Similar to the June 23 Brexit referendum date, Nov. 8 (the presidential election date) entails some very binary risks. Either everything remains as it is, which a Clinton victory would imply, or there is a likelihood of everything or at least a lot changing rapidly."

Earlier, the Mexican peso touched record lows of around 19.92 pesos per dollar on concerns that a Trump victory would threaten Mexico's exports to the United States, its single biggest market. Data from the U.S. Commodity Futures Trading Commission on Friday showed that speculators had recently ramped up their bearish bets against the peso. was trading at 19.5950 in Europe, up around 1.4 percent on the day. Similarly the Canadian dollar was flat at C$1.3215 per U.S. dollar CAD=D4 , having weakened to a six-month low earlier in the Asian trading session.

Earlier, both presidential candidates traded barbs and accusations in their first debate. Clinton accused Trump of racism, sexism and tax avoidance while the real estate tycoon, making his first run for public office, said Clinton's long years of service represented "bad experience". CNN/ORC snap poll said 62 percent of respondents felt Clinton won and 27 percent believed Trump had prevailed.

"Markets fretted that a strong Trump performance would add to his recent momentum, but the consensus takeaway was that Clinton had the upper hand with a sharp performance and the concern in asset markets yielded to a relief rally," said John Hardy, head of currency strategy at Saxo Bank. (Editing by Mark Heinrich)

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