Mexican peso rallies as Donald Trump falters

The Mexican peso rose against the dollar as Donald Trump’s chances of winning the White House seemed diminished after the second pre-election debate with Democratic Party candidate Hillary Clinton.

Mr Trump has vowed to build a wall on the border with Mexico and renegotiate or scrap the North American Free Trade Agreement if he is elected, making the peso somewhat of a barometer of his chances.

The Mexican currency rose at one stage 1.9% to 18.97 against the dollar.

A CNN-ORC snap poll of debate watchers found that 57% thought Ms Clinton won the encounter, compared with 34% for Mr Trump.

Mr Trump’s campaign was rocked by the release of a 2005 video in which he made vulgar comments about women.

US stocks rose with oil amid optimism that major crude producers will work with the Organization of the Petroleum Exporting Countries (Opec) to cut output.

Equity markets face risks from the US elections to higher borrowing costs and corporate earnings in the final quarter of the year, with strategists saying a holiday rally is not in the cards.

Traders are also keeping a close eye on crude as ministers from some of the largest producers gather in Turkey to discuss ways to end a supply glut.

“The gains today could be because Putin has said that he’s willing to reduce output and freeze production to increase the price of oil,” said John Conlon, chief equity strategist at People’s United Wealth Management.

“The earnings season is now going to be grabbing attention for the next three weeks.

“Earnings are going to push the interest rate and oil discussion aside.”

American stocks have gotten off to a rocky start in October, with the S&P 500 ending a three-week winning streak as recent economic data and hawkish comments by Federal Reserve officials boosted speculation of a rate increase by year-end.

“We’re on shaky ground and there’s a lot to digest in this quarter — earnings, politics and the Fed,” said Heinz-Gerd Sonnenschein, an equity strategist at Deutsche Postbank in Bonn.

“It’s really not easy to assess how these factors will impact the market.”

Amid a spate of strong economic reports, traders have boosted odds for a December Fed hike to almost 68%, from 51% two weeks ago.

Minutes from the central bank’s September meeting will be released tomorrow, while data on retail sales, producer prices, and consumer sentiment are due on Friday. Investors are also seeking clues on the health of corporate America.

European stocks posted their first gains in four days as a surge in crude propelled energy companies higher.