Mexico’s currency rallied on Monday, with the peso wiping out more of its post-US election plunge, after early polling in a key local election pointed to a narrow victory by the country’s governing party.
The peso jumped 1.46 per cent to MXN18.41, the highest level on a New York fix basis since the day of Donald Trump’s shock election victory.
Monday’s move higher, the biggest since late March, came after early exit polling indicated Alfredo del Mazo, the candidate of Mexico’s ruling Institutional Revolutionary Party, was poised to win in the race for governor of the State of Mexico. The election was seen by currencies traders as something of a litmus test ahead of next year’s presidential election.
Kit Juckes, a strategist at Societe Generale, said the rally came amid “relief” that the PRI was poised to win the governorship.
The peso has posted a stunning recovery over the past few months, having traded as weak as MXN21.96 to the buck in mid-January. Analysts have pinned the emerging-market currency’s comeback on a brightening economic outlook and expectations that much of Mr Trump’s fiery campaign rhetoric over America’s neighbour to the south will likely not come to fruition.