Mexican Peso Surges After Comments From Wilbur Ross

The World Trade Organization is necessary but needs "fine tuning" to improve the dispute settlement procedure between countries, new US Commerce Secretary Wilbur Ross said Friday.

The peso lost more than 20 percent of its value against the dollar since Donald TrumpDonald TrumpGOP rep: Trump or Mike Pence will be president for next 4 years The Hill's 12:30 Report The art of Donald Trump's persuasion MORE entered the White House race in June 2015, calling for the renegotiate or repeal the North American Free Trade Agreement.

The peso hit a historic low on January 11, after tumbling about 17 percent on concerns that Trump would follow through on threats to tear up the North America Free Trade Agreement (NAFTA) that underpins Mexico's economy.

"I believe that if we and the Mexicans make a very sensible trade agreement the Mexican peso will recover quite a lot", Ross said during an interview on CNBC's Squawk Box.

Mexican officials have said they are open to reviewing NAFTA.

The U.S. isn't talking with China yet about trade, said Ross. The Mexican peso is now trading at 19.56 per dollar, up 2.4 percent so far today.

The peso has declined nearly 10 percent over the past year, boosting the cost of imports into Mexico, while making its exports more competitive. Talks to modernize the trade deal will also address mechanisms to ensure the peso-dollar exchange rate becomes more stable and explore ways for Mexican workers get better wages and living standards.

The central bank on Monday will auction up to $1 billion of the new hedge instruments, and on Friday it said it would offer six maturities of up to one year, offering more in shorter maturities than longer.

  • Zachary Reyes