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Commerce Secretary Ross Says The Mexican Peso Will Recover 'Quite A Lot'

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Commerce Secretary Ross Says The Mexican Peso Will Recover 'Quite A Lot'

Wilbur Ross, billionaire investor turned Commerce Secretary in the Trump administration, was interviewed during Friday's segment of CNBC's "Squawk Box." Among one of the many topics of conversation was President Donald Trump's call to renegotiate the North American Trade Agreement.

Ross said that the Mexican peso has been particularly hard hit as of late due to uncertainty surrounding what role Mexican will play in any revised agreement. However, Ross brushed off concerns and said that a "very sensible trade agreement" will result in the Mexican currency recovering "quite a lot" of the value it had lost.

Peso's Path Forward

The Mexican currency has lost close to 10 percent of its value against the U.S. dollar over the past year but Ross' comments actually helped the currency to spike higher by more than 1 percent Friday morning.

Although Ross' comments eased concerns the relief may be short term as the NAFTA treaty will likely feature a lot of reform and changes on the Mexican side but minor tweaking on the Canadian side.

See Also: Trump's Commerce Secretary Nominee Explains How U.S. Gets Screwed In Trade

Ross also noted some of the areas of the treaty the Trump administration is looking to change involve rules of origin, which allow a certain amount of goods to enter the country from non-NAFTA nations. These goods still benefit from the agreement's tariff perks and in its current form is "too lenient."

Also, Ross wants to see stability in the Mexican–U.S. dollar exchange rate and for NAFTA to fulfill its original pledge of bridging the gap between Mexico's living standards and U.S. standard — something that not only hasn't happened but in some aspects worsened given the decline of the peso and little changes in Mexican wages over the years.

Posted-In: CNBC Donald Trump Mexican pesoPolitics Forex Markets Media General Best of Benzinga

 

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