The Mexican peso touched its highest level in 10 months against the U.S. dollar on Wednesday, approaching its highest since May 2016, and its run likely has not run out, some investors say.
The peso fell to its lowest level in history against the dollar on Jan. 19, the day before U.S. President Donald Trump’s inauguration, as traders worried that his campaign pledges to scrap the North American Free Trade Agreement and erect a wall between the two countries would weaken the Mexican economy.
But since Trump moved into the White House the peso has been on a tear, rising more than 20 percent against the dollar. It has been the world’s best performing major currency so far this year.
Rhetoric from Trump’s administration has become less corrosive since he took office. This and the Bank of Mexico’s aggressive monetary policy, including unexpectedly raising its benchmark interest rate last month to an eight-year high of 6.75 percent, have helped the peso firm to its highest level since Aug. 16.