Mexico peso jumps with stock futures after FBI clears Clinton

Mexican pesos and US dollar banknotes are seen in this picture illustration.
Mexican pesos and US dollar banknotes are seen in this picture illustration.PHOTO: REUTERS

WELLINGTON (BLOOMBERG) - Mexico's peso gained with US and Japanese index futures on Monday (Nov 7) after the US Federal Bureau of Investigation said it maintains the view that Hillary Clinton's handling of her e-mails wasn't a crime. The yen and Swiss franc retreated with Australian debt.

Mexico's currency, which has tended to strengthen on signs Republican presidential candidate Donald Trump's campaign is faltering, climbed the most in almost a month as the FBI's letter spurred gains in S&P 500 Index futures. With two days to go until Americans head to the polls, the Canadian dollar also advanced, while the yen sank at least 0.5 per cent with the franc and the euro. Australian government bonds fell with Treasury futures as oil rebounded from a six-week low. Stocks in Sydney and Wellington rallied.

The FBI is sticking with its view that Clinton's handling of e-mails during her tenure as secretary of state wasn't a crime, after reviewing new communications potentially related to the Democratic candidate, director James Comey said in a letter to Congress dated Sunday in the US Comey's statement just over a week ago that the bureau was looking into more e-mails sparked a selloff in risk assets, with US stocks capping their longest run of losses since 1980. The peso's fortunes have been tied to Trump's campaign given his pledge to renegotiate trade deals with Mexico and to build a wall along the U.S. border.

"All that drama and yet the FBI director is sticking to the same conclusion that they had in July with respect to Hillary Clinton's e-mail," Naeem Aslam, chief market analyst at Think Markets UK Ltd in London, said in an e-mail. "This is good news for investors who have an appetite for risk in this environment."

The peso climbed 2.1 per cent to 18.6294 per US dollar as of 8:09 a.m. Tokyo time, rising the most since Oct 10 in a third session of gains. The currency slipped last week after news the FBI was reviving its probe into the e-mail issue - which has dogged Clinton's campaign - saw her lead over Trump in opinion polls reduced.

"We reviewed all of the communications that were to or from Hillary Clinton while she was Secretary of State," Comey wrote in the letter out Sunday. "Based on our review, we have not changed our conclusions that we expressed in July with respect to Secretary Clinton."

The loonie, which some analysts have suggested is also moving on US election sentiment, snapped a three-day decline to climb 0.4 per cent early Monday, to C$1.3354 per dollar.

"Low Asian liquidity looks to have exaggerated the moves," Elias Haddad, a senior currency strategist at Commonwealth Bank of Australia in Sydney, said by instant message. "Nonetheless, US political uncertainty ahead of Tuesday's presidential elections will continue to generate dollar volatility as most swing-state polls suggest the election outcome will be a close call."

The yen, which typically moves at odds with Japanese shares, weakened 0.8 per cent to 103.98 per dollar. The haven currency rallied 1.6 per cent last week, the most since July. The franc slipped 0.6 per cent and the euro weakened 0.5 percent.

E-mini futures due in December on the S&P 500 jumped 1.1 per cent to 2,105.25 following a nine-day slide in the underlying benchmark.

In Japan, Nikkei 225 Stock Average futures were bid up 0.3 per cent to 16,940 in the Osaka pre-market, while yen-denominated contracts on the gauge surged 1.8 percent in Chicago to 17,150.

The CBOE S&P 500 Volatility Index, a gauge of expected swings in US stocks, soared 39 per cent last week as Clinton's lead was cut. While the race has tightened, the Democratic nominee maintains a 2.2 percentage-point lead over Trump, according to an average of polls by RealClearPolitics.