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Mexico’s economy humming along as peso improves

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Mexico has notched up a trade surplus in February and the economy grew more than expected in January. Even more good news for the country: the peso is back to its pre-U.S.-election levels, the Financial Times notes today.

So has “Trump trouble” been averted, the U.K. newspaper asks. “Maybe,” comes the answer.

Mexico’s non-oil trade balance is at a surplus of US$684 million, after recording a US$783 deficit this time last year. And the peso is at 18.86 to the dollar, much stronger than the 22 it hit in January. A competitive peso helps exporters.

Moreover, a global indicator of economic activity rose 3 percent in January compared to the same month in 2016, with a consensus forecast of 1.9 percent growth. Manufacturing is buoyant and the volatile agricultural sector is surging, FT reports.

But there are still risks, particularly with U.S. President Donald Trump’s looming tax and trade policy. A potential border adjustment tax would essentially tax imports, but the White House’s specific objectives for renegotiation of NAFTA will be clear by May or June.

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