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Mexico and Trump: Traders are going to keep watching the peso after the election

A board displaying the exchange rates of Mexican peso against the U.S. dollar and the euro is seen at a foreign exchange house at the international airport in Mexico City, Mexico November 8, 2016.
Henry Romero | Reuters
A board displaying the exchange rates of Mexican peso against the U.S. dollar and the euro is seen at a foreign exchange house at the international airport in Mexico City, Mexico November 8, 2016.

Investors watched the Mexican peso closely throughout the presidential campaign, and they're going to keep watching it — for entirely new reasons.

"Dollar-MXN has been the 'Will Trump win?' trade, and now it's the 'Was he serious?' trade," said Adam Button, managing director at ForexLive.com.

Trump has called for building a wall on the Mexico-U.S. border, threatened to round up and deport illegal immigrants, and has even said he would go as far as withdrawing the U.S. from the North American Free Trade Agreement.

In contrast to continued weakness in the peso Wednesday morning, U.S. stocks attempted slight gains with health care and financial stocks among the top performers. Dow futures had briefly dropped 800 points overnight.

U.S. dollar vs. Mexican peso 24-hour performance

Source: FactSet

"The market is much less concerned about the Trump victory than many feared initially," said Michael Bolliger, head of emerging market asset allocation at UBS Wealth Management in Zurich. "The pattern we see is, those [currencies] that are heavily involved in trade with the U.S. ... they are down more significantly than currencies driven by domestic growth drivers."

The United States is Mexico's single biggest market for exports.

The dollar-peso was near 19.945, as of 10:55 a.m. Wednesday, with the peso still about 9 percent weaker versus the dollar from Tuesday's close of 18.297.

From 9 to 10 p.m. ET Tuesday, trade activity in the dollar-peso currency pair surged to 63 times normal levels for that hour, according to data from currency settlement system CLS.

The record level of peso weakness hit overnight was 20.77 in the dollar-peso cross. See what the peso is doing here.

"Ultimately if nothing changes, the Mexican peso will bounce back, but if there's a full-on trade war with Mexico the peso will go much, much lower," Button said.

— Reuters and CNBC's Gina Francolla contributed to this report.