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Mexican peso regains footing as greenback falls

Mexico City, Mexico — On Friday, the Mexican peso was ranked as the best performing globally before the start of the third round of NAFTA negotiations Saturday.

The Bank of Mexico reported closing Friday at 17.7365. During the day, the peso gained 14.75 cents, equivalent to 0.82 percent. This percentage is the highest since July 14 of this year when the Mexican currency advanced 1.09 percent.

The Bank of Mexico reports that Mexican currency advanced due to the weakness of the dollar in the international market. The Mexican peso’s reaction to tweets by U.S. President Donald Trump on NAFTA and the border wall are having less of an effect.

Gerardo Rodriguez, money manager at BlackRock Financial Management Inc. in New York says, “Trump’s tweets have had less and less of an impact, but this came after an almost 20 percent appreciation of the peso. The dollar has been falling too and both these trends are changing.”

“We are entering a phase of the market where the potential for further gains going forward is much smaller,” Rodriguez said.

Citigroup currency and rates strategist Dirk Willer said his recommendation is to keep Mexican assets underweight in their emerging-market portfolio. The bank sees the peso weakening to 18 pesos per dollar by the end of the year, and to 18.20 by the end of the first quarter.

Traders are adjusting their positions, he said from New York. “And it’s accelerating today.”