The peso could recover “quite a lot” if the U.S. can reach a sensible agreement with Mexico on renegotiating the North American Free Trade Agreement, U.S. Commerce Secretary Wilbur Ross said.
“The peso has fallen a lot, mainly because of the fear of what will happen with Nafta,” Ross, 79, said in an interview on CNBC on Friday. “I believe that if we and the Mexicans make a very sensible trade agreement, the Mexican peso will recover quite a lot.”
The peso has declined more than 8 percent over the past year, boosting the cost of imports into Mexico, while making its exports more competitive. The currency rose 2.45 percent on Friday in the wake of Ross’s comments.
The Commerce secretary said the first trade priority of Donald Trump’s administration is to re-negotiate Nafta, which Trump described on the campaign trail as the “worst” trade deal of all time. The administration has indicated that the target of the reforms will be Mexico while only tweaking ties with Canada, though specifics are still scant.