(Bloomberg) -- What if the president tweeted and nobody cared? That's pretty much what happened on Monday, when Donald Trump's declaration that he was prepared to permanently shut the U.S. border with Mexico provoked little more than a blip from peso traders.
Yes, the peso fell against the U.S. dollar on the news -- but it dropped just 0.6 percent and then quickly rebounded from the day's lows. It's a far cry from the currency's 8.3 percent tumble the day after Trump was elected two years ago on a campaign that touted plans to wall off the entire border and make Mexico pay for it.
"The border threats don't have nearly the same market implications that other factors do currently," said Ilya Gofshteyn, a strategist at Standard Chartered in New York. While investors are concerned about government policy under incoming President Andres Manuel Lopez Obrador, strong fundamentals and the high carry trade are luring some back, she said.
Trump made similar threats in October ahead of midterm elections, warning that an approaching “caravan” of migrants posed a risk to U.S. security and claiming without evidence that criminals were among the group. So far, he hasn't followed through on those threats.
Mexico is the third-largest American goods trading partner with $557.6 billion in two-way trade during 2017, according to the Office of the U.S. Trade Representative. Trade in services accounted for another $58 billion.
--With assistance from Terrence Dopp.
To contact the reporters on this story: George Lei in New York at glei3@bloomberg.net;Justin Villamil in Mexico City at jvillamil18@bloomberg.net
To contact the editors responsible for this story: Rita Nazareth at rnazareth@bloomberg.net, Alec D.B. McCabe, Philip Sanders
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