Mexico’s peso traded at its strongest level this year on Monday, backed by expectations that new U.S. trade policies may not hammer the country’s exports as badly as expected.
The peso gained over 1 percent against the dollar to trade at its strongest since Dec. 30 before slipping back to trade around 20.75 per dollar.
The currency has rallied even though Mexican-U.S. relations appeared to hit a low point last week after President Donald Trump insisted Mexico pay for a new border wall, pushing Mexico’s President Enrique Pena Nieto to cancel a U.S. trip.
Despite the disagreement, the peso has gained sharply, up about 4 percent since Wednesday after Trump also said that Mexico’s economic future was important to the United States.
The peso has hit a series of record lows since Trump’s election on concerns he could rip up a free trade deal with Mexico, which sends nearly 80 percent of its exports to its northern neighbor.