Data from the U.S. Commodity Futures Trading Commission on Friday showed speculators had recently ramped up their bearish bets against the Mexican currency.
The dollar was last down 1.6 percent against the peso at 19.55 pesos after hitting an 11-day low of 19.44 pesos in early trading. The dollar was on track for its biggest daily drop against the peso in three weeks.
Relief that Clinton's performance was viewed as superior also likely helped the dollar gain against the euro given uncertainty surrounding a potential Trump presidency, Franulovich of Westpac said.
Markets have tended to see Clinton as the candidate of the status quo, while few are sure what a Trump presidency might mean for U.S. foreign policy, international trade deals or the domestic economy.
"You might argue that currencies like the yen and the euro had a defensive quality about them that were benefiting from Trump risk," he said.
The dollar was last mostly flat against the yen at 100.26 yen after falling 0.7 percent against the Japanese currency on Monday. The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.33 percent at 95.609.