CUTTING GAP: Donald Trump.
CUTTING GAP: Donald Trump. Evan Vucci

Mexican peso falls as Trump's prospects rise

THE Mexican peso has hit a record low and continues to plummet in value as polls indicate Donald Trump's chances of becoming US president have increased.

Observers say the development is largely due to the improving prospects of the Republican presidential contender and health concerns surrounding his rival, Hillary Clinton.

The Democratic candidate had been leading Mr Trump by 5.5% on August 20, but the national polling average measured by Real Clear Politics gave her a lead of just 1.1% on Tuesday, with 41.4% of the vote compared to Mr Trump's 40.3%.

"This 'Trump effect' causes much concern for Mexico's future,” analyst Raul Feliz from the Centre for Economic Research and Teaching think tank in Mexico City told AFP, citing the real estate tycoon's immigration and economic policies as key concerns.

Mr Trump's promises to deport millions of undocumented people and build a giant wall along the border with Mexico have already damaged relationships between the neighbouring nations.

The resignation of Mexico's finance minister, Luis Videgaray, was widely attributed to his role in organising Mr Trump's visit to the country on August 31.

But it is Mr Trump's protectionist economic policies that arguably present the biggest danger to the Mexican economy.

The US buys about 80% of Mexico's exports, but Mr Trump has threatened to terminate the free trade deal between the US, Mexico and Canada.

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