By Karin Strohecker, Noe Torres and Rodrigo Campos LONDON/MEXICO CITY/NEW YORK (Reuters) -Mexico's peso was narrowly weaker on Wednesday after largely recovering from a slump earlier in the day to its lowest level in more than two years,

The peso's weakness came as traders priced in the possibility that Republican Donald Trump could defeat Democratic candidate Kamala Harris. Trump has vowed to impose new tariffs on Mexican exports. Traders are bracing for more fluctuations as the vote counts from the hotly contested U.S. presidential election come in.

Gold trades flat as DXY and yields rise. The "Trump trade," which comprises of bullish bets in bitcoin {{BTC}}, the dollar index, and bets on higher Treasury yields and lower Mexican peso, is in full swing as the Republican candidate takes a notable lead over Kamala Harris in the presidential race.

Mexico's peso touched its weakest level in over two years on Wednesday as Donald Trump emerged victorious in the U.S. presidential election, extending a streak of volatility and weakness for the emerging markets bellwether currency.