The biggest exchange-traded fund to track Mexico’s equity market fell on Tuesday, erasing an early gain after Ford said it was cancelling plans for a new plant in San Luis Potosi.
The iShares MSCI Mexico Capped ETF EWW, -0.77% fell 0.6%, reversing a rise that took it as high as 1.8% early on in the day’s session. The Mexican peso USDMXN, -0.2004% also fell, trading at 20.92 to the dollar, compared with 20.74 late Monday, a move of about 0.9%.
In a statement, Ford F, +3.79% said it was cancelling the planned $1.6 billion plant in Mexico, news that came mere hours after President-elect Donald Trump tweeted at General Motors Co. GM, +0.89% saying GM needed to be taxed for certain versions of the Chevrolet Cruze small car that it imports from Mexico to U.S. dealers.
The day’s move continues Trump-related weakness that was seen in both the ETF and the peso last year. The peso fell to a record low in the wake of Trump’s unexpected victory in the U.S. election, while the ETF suffered its biggest one-day drop since 2008.
Trump’s administration is expected to be a major headwind for Mexico, as the president elect has proposed policies, including on both trade and immigration, that are seen as severe risks to the country’s economy. The ETF fell 11.8% in 2016, one of the biggest losers among single-country funds, with much of the losses coming in the wake of the election. The peso lost about 20% against the dollar last year.