Market Insider

The Mexican peso is getting Trumped again as polls swing

Activists hit the 'Pinata' of Donald Trump during demonstration against the US Republicans' Presidential candidate Donald Trump's policies against Mexicans and Latin americans, in front of the Monumento a Benito Juarez in Mexico City, Mexico on October 12, 2016.
Manuel Velasquez | Anadolu Agency | Getty Images

The Mexican peso has become the proxy for U.S. presidential election sentiment this year, and the trend was holding true on Wednesday.

In the last three months, the peso has swung back and forth between record lows and intermittent rebounds as Donald Trump has risen and fallen in election opinion polls. The Mexican currency is falling again this week as Trump's perceived odds of winning are nearing highs, according to PredictIt.org.

"People tend to agree that Mexican assets would underperform under a Trump presidency — that's clear for the market," said Andres Jaime, global FX and rates strategist at Barclays. He said the same sentiment supports a safe-haven trade, weakening the U.S. dollar against the Japanese yen and pushing gold prices higher.

Trump has called for building a wall on the Mexico-U.S. border, and said he would go as far as withdrawing the U.S. from the North American Free Trade Agreement.