January 3, 2017 / 4:22 PM / 8 months ago

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

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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