Mexico on Tuesday outlined tariffs against a wide range of US agricultural imports as well as steel products in response to American measures, sending the peso falling more than 1 per cent from Monday's closing level.
The country will impose tariffs on a slew of products produced by America's farmers, including pork, cheese, apples and potatoes, according to a document released by the Mexican government. Steel products will also be targeted.
Mexico's decision, which it had foreshadowed in recent days, comes in response to US tariffs on steel and aluminium imported from Mexico, Canada and the EU.
The peso has been under pressure of late amid growing concerns about trade between Mexico and the US, which is the world's biggest developed economy. Negotiations over the North American Free Trade Agreement have hit several snags and some strategists have said they fear President Donald Trump will pull America from the pact that underlies trade between the US, Mexico and Canada.
Just before 8:00am in New York, the peso fell 1.6 per cent against the US dollar, with one greenback buying MXN20.4. It brought the currency to levels not seen since February 2017, according to Reuters data. (Get the latest quote for the US dollar/Mexican peso here.)
"The Mexican peso fell …after Mexico published further details about the imposition of tariffs on US pork and amid uncertainty about the effects it will have on Nafta renegotiation," Mexican bank Monex said in a note to clients.
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