MEXICO CITY (Reuters) -Mexico’s peso on Friday hit its highest degree in opposition to the greenback since early December 2015, because the dollar misplaced steam after a slowdown in U.S. inflation bolstered the case for the Federal Reserve to finish its rate of interest hikes.

The foreign money, which has been dubbed the “tremendous peso” in some quarters, together with by its most outstanding cheerleader, President Andres Manuel Lopez Obrador, strengthened by greater than 1.3% in morning buying and selling to 16.63 per greenback.

“What’s taking place with the peso proper now is because of weak point within the greenback, but in addition due to optimism surrounding the Mexican peso,” stated Banco Base analyst Gabriela Siller.

“And with this worldwide buyers maintain shopping for Mexican pesos and it could maintain appreciating,” she added.

Knowledge pointing to softening U.S. inflation on the one hand and better-than-expected progress knowledge on the opposite has helped weaken the greenback and increase the peso, which might proceed firming to 16.40 to the greenback, Siller stated.

In a analysis notice this week, JPMorgan (NYSE:) analysts wrote that whereas the peso has been thought-about a “high-beta danger proxy foreign money for a lot of the previous 20 years, we expect it’s time buyers shed this outdated notion.”

“The peso has entered a brand new chapter that can possible be accompanied by decrease for longer volatility and a decoupling from the chance profile of its peer currencies in Latin America,” they forecast within the notice referred to as “MXN: Not your padre’s peso.”

Some analysts have warned {that a} extended peso run might ultimately be extra dangerous than useful to Mexico’s economic system as a result of it makes Mexican exports dearer and lowers the worth of remittances despatched again from america.