Things are heating up at the Mexico-US front, with the former bracing for a tough fight with the new President of the United States; Donald J. Trump. Mr. Trump has vowed to renegotiate North American Free Trade Agreement (NAFTA), bring back manufacturing jobs to the United States from countries like Mexico and build a wall along the Mexican border to prevent illegal immigration and insisted that the cost of the wall would be borne by Mexico.

Mexican president Enrique Pena Nieto, a few days back has announced that he is taking up actions to protect the interest of his own country and has vowed to stand up to President Trump. While Mr. Nieto tried to stand firm, his U.S. counterpart has kept on tweeting about the wall, keeping investors worried on Mexico. On Monday, Mr. Nieto said, not just trade but everything on the table is up for negotiations and insisted dialogue is the solution and Mr. Trump tweeted last night that he intends to build the wall.

Mexican economy minister Guajardo tried to take a hard stance by saying that Mexico is ready to withdraw from NAFTA if the deal is not good but everyone knows that given the destination of 80 percent Mexican exports as the United States, it is really not a good negotiating position.

Peso has remained under pressure, since Donald Trump's election win and is currently trading at 21.4 per dollar.