2 Min Read
MEXICO CITY, March 20 (Reuters) - Mexico's peso firmed on Monday to its strongest since Donald Trump clinched the U.S. presidency in November, tracking Latin American currencies higher after the U.S. Federal Reserve signalled it would hike rates gradually.
The peso gained more than 0.5 percent to 18.9750 per dollar, its strongest since Nov. 9 after Trump sailed to victory, vowing to build a wall on the U.S.-Mexico border and threatening to pull out of a key trade deal with Mexico.
The currency has perked up since the Fed last week stuck to its outlook for two more hikes this year and three more in 2018, when many had expected an accelerated spate of moves.
Philadelphia Federal Reserve president Patrick Harker echoed the statement on Monday, saying the bank would push inflation a bit above its 2-percent target even as it continues to gradually raise interest rates.
The peso, which hit a series of record lows after Trump's win, has gained around 15.5 percent since Jan. 19, the day before Trump took office, also helped by a more conciliatory tone towards Mexico from key U.S. trade officials.
"The peso has been one of President Trump's biggest winners because it was one of candidate Trump's biggest losers," said Alfonso Esparza, a strategist at Oanda in Toronto, who expects the peso to continue strengthening in the short run.
Citibank said in a client note on Monday it was upgrading its forecast for the peso to 19.3 per greenback in the next three months and 20.6 per dollar by the end of the year.
One of Trump's most protectionist trade advisers said last week he wanted Mexico, the United States and Canada to form a regional manufacturing "powerhouse."
Mexico's stock market was closed due to a local holiday. (Reporting by Noe Torres; Writing by Alexandra Alper; Editing by Andrew Hay)