The Mexican peso has emerged as an unlikely winner from Donald Trump’s trade war, as fading global risks and repeated delays to US tariffs lure investors back to the country’s high-yielding assets.

The currency was one of the big, early victims of Trump’s trade assault, weakening to as many as 21 pesos to the US dollar in frenzied trading in early February after the announcement of 25 per cent US tariffs on Mexico that were then delayed.

It has since rallied to just over 18.5 to the greenback, more than erasing its losses since Trump’s election, as investors take advantage of a lull in market volatility and positive trade developments to pile into high-yielding Mexican assets. The peso has risen 4 per cent over the past three months, making it the best-performing of a basket of highly traded currencies tracked by Bloomberg.