January 3, 2017 / 4:22 PM / 7 months ago

Mexico's peso deepens losses after Ford scraps Mexican plant plan

2 Min Read

Mexican pesos and U.S. dollar banknotes are seen in this picture illustration, November 3, 2016.Edgard Garrido

MEXICO CITY (Reuters) - Mexico's peso fell on Tuesday to touch its weakest level in seven weeks after Ford (F.N), the second-largest U.S. automaker, said it will cancel a planned $1.6 billion factory in Mexico's central state of San Luis Potosi.

The peso MXN=D2 weakened 0.93 percent to 20.9315 per dollar, its lowest level since Nov. 14, following the announcement by Ford, which had come under harsh criticism from U.S. President-elect Donald Trump for its Mexican investment plans.

Ford said it will invest $700 million at a Michigan factory.

The Mexican currency hit a record low after Trump clinched U.S. presidential elections in November.

The real estate mogul has threatened to scrap a key free trade deal between the two countries and slap a tax on remittances to Mexico if the country refuses to pay for a wall along its northern border.

Mexico's IPC stock index .MXX pared gains of over 1 percent to trade nearly flat at 45,755 points following Ford's announcement.

Reporting by Miguel Angel Gutierrez; Writing by Alexandra Alper; Editing by Alan Crosby

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