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Mexico's Peso Is Expected to Make a Big Comeback

  • Top forecasters predict modest appreciation in first half
  • Despite attractiveness, investors may still shy away from risk
Silver coins are melted in order to be re-used again at the Mexican Mint, or Casa de Moneda, in San Luis Potosi, Mexico.

Photographer: Susana Gonzalez/Bloomberg

Updated on

For all the concern that the U.S. might dump Nafta or that Mexico’s next president could upend economic policy, the peso is forecast to be the world’s best-performing major currency in the first half of 2018.

True, the expected gain is due in no small part to how much it sank at the end of last year. The peso tumbled to a nine-month low against the dollar on Dec. 26, capping a four-month decline fueled by worries Donald Trump will pull out of the trade agreement with Mexico and Canada, and that Andres Manuel Lopez Obrador could win election in July. The peso lost a third of its value during the past four years, when it was the worst performer among the world’s most-traded currencies.