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MEXICO CITY, March 6 (Reuters) - Mexico's peso on Monday strengthened to its highest level in nearly four months, ahead of a central bank auction of new currency hedge instruments and on hopes that a trade deal could be forged with the United States.
The peso firmed as much as 0.3 percent to 19.4350 per dollar, its strongest since Nov. 9, the day after Donald Trump's surprise presidential election win.
It then eased about 0.2 percent as riskier assets slipped around the world.
A rally has made the peso the top performing major currency so far this year. Last Friday the peso surged about 2 percent after U.S. Secretary of Commerce Wilbur Ross said a sensible trade deal with Mexico would help the peso.
The peso had tumbled about 17 percent since Trump's election to hit a historic low on Jan. 11, but it has now bounced back about 13 percent.
Later on Monday, Mexico's central bank will offer $1 billion in contracts of new peso hedge instruments that are similar to non-deliverable forwards that pay in pesos.
The central bank announced plans last month to sell up to $20 billion of the contracts, expanding its tool kit of measures it can use to support the peso. (Reporting by Michael O'Boyle Editing by W Simon)