Peso surges on more ‘neighborly’ U.S.-Mexico tone on NAFTA

3/3/2017 Reuters

50 PesosThe peso rallied on Friday to a nearly four-month high after the new U.S. commerce secretary offered a softer tone on trade talks and as his Mexican counterpart echoed the sentiment that the two sides could reach a mutually beneficial trade deal.

Already the best performing major currency in recent weeks, the peso MXN=MXN=D2 strengthened as much as 2.5 percent to 19.5085 per dollar on Friday, its best since Nov. 9, the day after Donald Trump’s surprise presidential election win.

The peso hit a historic low on Jan. 11, after tumbling about 17 percent on concerns that Trump would follow through on threats to tear up the North America Free Trade Agreement (NAFTA) that underpins Mexico’s economy.

Speaking on CNBC, Secretary of Commerce Wilber Ross said a sensible trade deal with Mexico would help the peso, which he acknowledged had been hit by fears about what could happen to NAFTA.

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