Mexico's peso firmed in its last trading day for the year on Tuesday as increasing investor confidence about global growth prospects and significantly better US-China trade relations sent the dollar to six-month lows on fading safe-haven buying. An index of the greenback against six major rivals was down 0.3%, putting the currency on track to log meagre gains for the year.
Mexico's peso rose 0.4% to 18.865 per dollar by 1630 GMT, while the benchmark IPC stock index fell 0.3%. Other major Latam stocks and currencies marked their last trading day of the decade on Monday. In a tumultuous year for Mexican markets, the peso was set to end the year up around 4%, building on 2018's bare minimum gains, while stocks rose 4.5%, recovering from a 15% fall last year.
After starting on a positive note, investors turned nervous when a trade deal with United States and Canada that was salvaged in September 2018 was revisited to ensure its labour provisions could be enforced.
As amendments to the deal were under discussion, a second blow came when US President Donald Trump vowed to impose tariffs on all goods from Mexico in response to a surge of illegal Central American immigrants across the southern border. Mexican assets plunged on the possibility of yet another tariff war. But tariffs were averted just days before they were to take effect after the United States and Mexico struck a deal, with Mexico agreeing to expand a controversial asylum program and deploy security forces to stem the flow of migrants.
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