The Mexican peso hit a fresh record low Wednesday a day after Ford said it had canceled plans to build a new plant in San Luis Potosi.
Instead, the auto maker said it would expand production at a Michigan factory.
The dollar USDMXN, -0.0751% strengthened 1.3% to 21.3953 pesos in recent trade, just barely overtaking a previous record low reached on Nov. 11. By comparison, one dollar bought 21.11 pesos late Tuesday in New York.
Mexican stocks also tumbled, with the iShares MSCI Mexico Capped ETF EWW, -1.21% down nearly 2% at $43.02 a share, just above its Nov. 11 postelection lows. The currency-hedged iShares Currency Hedged MSCI Mexico ETF HEWW, +0.21% rose marginally to $20.72 a share.
In a statement released Tuesday, Ford Motor Co . F, +4.61% said it would cancel the planned $1.6 billion plant in Mexico, and instead expand an existing facility in Michigan. The announcement came hours after President-elect Donald Trump criticized General Motors Co. GM, +5.52% for selling Mexican-made cars in the U.S.
The selloff in the peso has been widely attributed to the expectation that Trump’s proposed policies could upend the terms of Mexico’s trading relationship with the U.S., its largest export market. Trump has proposed raising tariffs on imported goods and renegotiating the North American Free Trade Agreement, which involves the U.S., Mexico and Canada.