Mexico's peso weakened to a historic low of 22 per dollar on Wednesday, shortly after U.S. President-elect Donald Trump began a news conference in New York.
The peso was the worst-performing major currency last year, weakening 20 percent against the dollar as Trump closed in on the U.S. presidency.
The currency pared losses slightly after passing the psychological 22 peso barrier to trade at 21.90 per dollar, dipping 0.45 percent at 10:40 a.m. eastern.
The peso's depreciation has sped up in the first few days of 2017. Trump told major automakers last week to expect high taxes on vehicles made in Mexico that are sold in the United States as he attempts to bring back manufacturing jobs.
Earlier, the dollar gained ground against the yen, euro and pound on Wednesday, as expectations of a pro-growth message from U.S. President-elect Donald Trump's first news conference prevailed over worries about what he will say on trade and China.
The dollar has gained broadly since Trump's victory in November as investors bet he would boost public spending and spur repatriation of overseas funds by U.S. companies, policies expected to bring higher inflation and interest rates.
But more doubts have emerged in recent weeks about that narrative, and investors will have a close eye on what the new president says about labelling China a currency manipulator and free trade more generally.
"The surprise would be if he talks about his concerns about dollar strength," said Simon Derrick, head of research at Bank of New York Mellon in London.
"He has made comments suggesting he is uncomfortable with a strong dollar, but the market has largely ignored them."
The fell 0.29 percent to 101.71. Against the yen, it fell 0.35 percent to 115.36 yen, still two percent off almost one-year highs hit in December.
The euro was also up 0.24 percent at $1.0578 after brushing a 10-day high of $1.0628 overnight.
"The dollar is still holding up quite well and there is a presumption that we are going to get support from tighter monetary policy and looser fiscal policy," said Jeremy Stretch, head of currency strategy at CIBC in London.
"Overall we're still constructive but it does look more a case of playing the end of the rally before we see a correction later this year."
The morning's other big mover in Europe was sterling, hit by a worse than expected trade deficit after a week of political news which added to fears Britain is heading for an economically damaging "hard Brexit" from the European Union.
The pound rose 0.28 percent against the dollar. Sterling last traded at $1.221.