If the United States and Mexico were able to renegotiate a good trade deal, the beaten-down Mexican peso should really recover, Commerce Secretary Wilbur Ross told CNBC on Friday.
Ross, a billionaire who made his fortune investing in distressed assets, said the peso has fallen on worries about President Donald Trump's desire to renegotiate the North American Free Trade Agreement. The Commerce secretary has been tasked by the president to find ways to level the playing field on international trade for American companies.
"I believe that if we and the Mexicans make a very sensible trade agreement the Mexican peso will recover quite a lot," Ross said on "Squawk Box."
Dollar/peso 2-day chart
The U.S. dollar fell sharply against the Mexican currency, dropping 0.74 percent to 19.84, after first spiking as Ross spoke.
The peso has fallen about 20 percent in value since June 2015. That's when Trump got into the presidential race with a fiery speech that was highly critical of Mexico.
Ross also said mechanisms need to be put in place to make the peso-dollar relationship more stable.