Peso surges to four month high with more 'neighborly' U.S.-Mexico tone on NAFTA

By Elliot Bullman

The 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.

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Already the best performing major currency in recent weeks, the peso 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.

According to an Excelsior exercise, based on Bloomberg data, the peso has gained 10.3 percent since Trump's arrival in the White House and has outperformed the currencies of six developed countries and another 11 emerging markets economies.

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From January 19 through February 24 the peso went from 21.95 pesos to 19.91 dollars per dollar. One of the reasons is that it is considered that the actions of Trump do not affect the interests of Mexico, for now.

Baseline analysis director Gabriela Siller noted that Trump's ads are considered "rhetoric", as evidenced by the fact that it does not speak negatively of the North American Free Trade Agreement, as it did with The Transpacific Association Agreement.

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"With this we can read between the lines that the United States is interested in NAFTA, because 16 percent of its exports go to Mexico," said Siller,

A weak peso works against the interest of the U.S. administration, because it makes Mexican exports more attractive.

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