The US dollar has fallen to the lowest level against the Mexican peso since this time in 2016. That marks a seven-year high in the peso that completes a retracement of the pain from the early part of Trump's anti-Mexico presidency.
Building a wall on the Mexican border was the single-largest talking point for Trump in his early rise to political prominence but it ultimately amounted to very little, and Mexico certainly didn't pay for it.
Trump did renegotiate NAFTA but the agreement was more of a modernization of the accounting for electronic auto parts and the US lost the first dispute on that file.
Instead, Mexico is benefiting from angst about a trade war with China; something that also kicked off under Trump. The move towards reshoring looks to be a powerful factory and there's a shift to production in Mexico where low-wage workers are plentiful. The country also stands to benefit from inbound investment in resources as it looks to capitalize on the coming mining boom and also tries to straighten out its energy production.
I've long been a bull on the Mexican peso but it's been a slow trade to unfold. Much of that is because the US dollar has been globally strong but if the dollar cracks, then there's still plenty of room for the peso to run, with a complete retracement of the USD/MXN rally since 2015 possible.
Mexico's central bank meets this week and 12 of 15 analysts polled by Reuters see no change from the 11.25% benchmark rate with the remainder seeing a 25 bps hike. The high rate combined with a rising currency is a compelling case for inbound capital but inflation is starting to ease and cuts late this year could reverse some of those flows. The benchmark 10-year yield in Mexico nearly hit 10% in October but has since slid to 8.77%.