The Mexican Peso (MXN) is recovering some ground against the US Dollar (USD) on Wednesday, on rumors that tariffs imposed by the United States (US) since March 4 could be rolled back or at least adjusted,

The Canadian dollar and the Mexican peso hunkered near their lowest in a month on Tuesday as trade war fears sapped sentiment after U.S. President Donald Trump said 25% tariffs on goods from the two neighbouring countries will take effect on Tuesday.

Price action in the Mexican peso and Canadian dollar suggests markets are hopeful U.S. tariffs won't remain in place for long, MUFG Bank's Lee Hardman said in a note. The initial falls in the two currencies look relatively modest given the scale of tariffs,