The Australian dollar would suffer most if Donald Trump were to win the U.S. presidential election, according to one foreign exchange strategist who calls the currency a "surprise trade" in this arena.
Boris Schlossberg, managing director of FX strategy at BK Asset Management, pointed out the Mexican peso has been the "inverse proxy for Trump's political fortunes in the currency market for the last month," appearing to rise and fall conversely on the Republican nominee's favorability in the polls.
Trump has made global trade his biggest issue in the election, taking an especially dim view of America importing goods from Mexico, and his policies are thus expected to hurt the Mexican economy.
"But frankly, I think a lot of that trade has already been priced in," Schlossberg said Wednesday on CNBC's "Trading Nation."
To get to the Australian dollar, Schlossberg points out that after Mexico, China is Trump's "biggest nemesis."
Trump has repeatedly pointed to China as a problem for the U.S. economy. He has proposed implementing higher taxes on Chinese imports and says American leaders should take a hard line on the management of China's currency.
"Since Australia pretty much supports all of the commodity product to China, it's going to create a very big backlash onto them," Schlossberg said.
China is Australia's largest trading partner, according to the Parliament of Australia, and Australia is China's sixth-largest trading partner. This relationship has developed over the years as "the Chinese economy moves from a focus on investment in physical infrastructure to developing social infrastructure," according to the Parliament.
Further, since the Australian dollar benefits from the rate differential with the U.S. dollar, the Aussie currency could suffer if Trump were to clinch the win and likely raise rates, Schlossberg added.
According to an NBC News/Survey Monkey poll, 52 percent of likely voters said Democratic nominee Hillary Clinton "won" the first presidential debate, and 21 percent believed Trump prevailed. The Mexican peso strengthened dramatically against the U.S. dollar during the debate, while the Australian dollar rose slightly.