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Cramer: Trump's reported retreat on NAFTA gives the peso a reason to climb more

Word that the Trump administration may be backing away from big plans to revamp the North American Free Trade Agreement could be good news for the Mexican peso, CNBC's Jim Cramer said Thursday.

President Donald Trump's staff is signaling to Congress it would only seek modest changes to NAFTA, according to a document obtained by The Wall Street Journal.

During the presidential campaign, Trump called NAFTA a "disaster," and the "worst trade deal in history." He said it has resulted in the loss of millions of U.S. manufacturing jobs, and he vowed to quit the trade pact unless it can be renegotiated.

"The NAFTA backoff was rather shocking," Cramer said on "Squawk Box." "This is a reason to think that the peso can continue to climb."

The peso hit a historic low in January on concerns that Trump would follow through on his threat to overhaul the trade agreement with Mexico and Canada.

The peso was the worst-performing major currency last year, weakening 20 percent against the dollar as Trump closed in on the presidency.

The peso rallied earlier this month, however, to a near four-month high after Commerce Secretary Wilbur Ross offered a somewhat softer tone on trade talks.

—Reuters contributed to this report.