The Mexican peso rebounded against the dollar on Thursday following a report that the U.S. may delay Mexico tariffs.
Earlier the peso was down as much a 1.4% but is now trading down 0.3% after Bloomberg News reported that the U.S. was considering delaying the tariffs on Mexico.
President Donald Trump's 5% tariff on all Mexican goods was supposed to go into place on Monday but according to the report, Mexico pushed for more time to negotiate immigration issues.
The weakness is the currency earlier in the day came after two ratings agencies lowered their outlook on the country amid heightened trade tensions with the U.S.
Moody's Investors Service on Thursday cut the outlook on the Government of Mexico's ratings to negative from stable, citing "unpredictable policymaking" and "lower growth." Fitch slashed Mexico's rating to near junk status, noting the worsening credit profile of the state oil company Pemex.
"The policy framework is weakening in two key respects, with potential negative implications for growth and debt," Jaime Reusche, senior credit officer at Moody's said in a statement. "First, unpredictable policymaking is undermining investor confidence and medium-term economic prospects. Second, lower growth, together with changes to energy policy and the role of PEMEX, introduce risks to Mexico's medium-term fiscal outlook."