By Gabriel Stargardter and Miguel Gutierrez
MEXICO CITY (Reuters) - Mexico's beleaguered peso
The peso
The peso was down 3.15 percent to trade at 21.24 pesos per dollar around 10 a.m.(11 a.m. EST) on Friday. The dollar has gained nearly 13 percent against the peso this month.
Trump's presidential win has smashed Mexican assets, which are still reeling after the surprise victory on Tuesday, and has led analysts to lower forecasts on Mexico's economic performance.
"Even assuming no trade tariffs, we think that a mix of heightened uncertainty, a weaker peso – leading to higher inflation – and significantly tighter monetary policy will weigh on the Mexican economy," Oxford Economics said in a note, adding that it lowered its 2017 and 2018 growth forecasts to 2.1 percent and 2.4 percent, respectively, from 2.5 percent and 2.4 percent growth previously.
However, some felt it could be an opportune moment to snap up Mexican assets.
"We are taking advantage of the volatility. For example, in the case of Mexico, it looks like a great opportunity to buy stocks and the currency is down dramatically ... generally speaking this provides a great opportunity," Templeton's Mark Mobius said on CNBC.
So far, Mexican authorities have declined to intervene to stem the peso's losses, a move most analysts had expected, choosing instead to wait until next week's central bank meeting.
"At current juncture we have conviction that the situation might get worse before stabilizing (blame it also on the erratic communication and dogmatic approach from Banxico)," BNP Paribas (PA:BNPP) said in a note.
Oxford Economics said it expected the Banco de Mexico to raise interest rates by 50 basis points at the Nov. 17 meeting, and by an additional 75 basis points next year.
The peso, the world's worst performing currency this year, took its biggest two-day tumble in more than 20 years following Trump's victory, while Mexican stocks (MXX) diverged from rallying U.S. equities for a second day on Thursday, losing nearly 5 percent.