A 7.1 Earthquake struck Puebla, Mexico and Mexico City as well. It had an impact on the Mexican Peso.
An Earthquake in Puebla, Mexico that was at its most intense level in Puebla also affected nearby Mexico City. To those unfamiliar with Mexico, Puebla is a major Mexican city and this metropolitan area has nearly three million people. It is the fourth largest metro area in Mexico and the city itself has a larger population than the cities of Frankfurt and Munich combined. There is a strong potential that this earthquake resulted in mass casualties and property damage. The worse news is the potential for aftershocks in the wake of the 7.1 Earthquake.
Earthquakes are not uncommon in Mexico. An 8.0 Earthquake took place on the same date 32 years ago.
— Mónica Carrillo (@MonicaCarrillo) September 19, 2017
This is a tragic event that comes with significant human cost and it is an event that could be damaging to the Mexican economy. Puebla and Mexico City are very important economic centers in the country.
Traders and speculators reacted to the news in the way they know how, by shorting the Mexican Peso.
At 2:14 PM Eastern Time, the earthquake hit Puebla and Mexico City. At 2:16 PM Eastern Time, traders took action buying U.S. Dollars against the Mexican Peso. Soon others followed and by the time the dead cat bounce was finished, it was all over the newswires and the rest of the market was in a rush to sell. The USDMXN rally does appear to be short-lived as the Mexican Peso regained strength after the initial panic trade.
When it comes to the currency markets, this earthquake was nothing compared to the Election of Donald Trump as President of the United States of America.
The Mexican Peso was experiencing a sell-off in November 2016 with the anticipation of a President-Elect Hillary Clinton, but the market prices were showing an inkling that something different could be happening during the 7 PM hour on November 8, 2017. The confirmation that plans were about to radically change took place during the 8 PM and then by the 9 PM hour, the currency markets were telling the world that Donald Trump would win.
Do currency and commodity traders need NOAA storm projections and USGS streaming data? If they are scalping to make a quick profit, they probably should.
Let’s all hope that the damage is minimal and that Poblanos and Capitalinos survive this. Keep the people of Mexico in your prayers and if you wish to help, please visit CharityNavigator.org to find the most effective charity to address this crisis.