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By Evelyn Cheng, CNBC and Patti Domm, CNBC

The Mexican peso weakened against the U.S. dollar in afternoon trade Tuesday after earlier hitting its strongest level against the greenback in about two months.

The peso has become the proxy for U.S. presidential election sentiment this year. In the last three months, the peso has swung back and forth between record lows against the U.S. dollar and intermittent rebounds as Donald Trump has risen and fallen in election opinion polls.

In early afternoon trade, the peso was trading only about half a percent stronger against the dollar.

Earlier, the peso traded as much as 0.9 percent stronger against the greenback to hit its strongest level against the dollar since September 8.

Strategists also said it appears that markets are getting more comfortable that Clinton could win.

"Dollar/peso will be the absolute proxy for the election, and if we see massive moves in dollar/peso by around 8 o'clock in the evening, it will mean the exit polls are strongly indicating she has a wrap on it," said Boris Schlossberg, managing director, forex strategy at BK Asset Management.

Trump has called for building a wall on the Mexico-U.S. border, and said he would go as far as withdrawing the U.S. from the North American Free Trade Agreement.

The Mexican peso hit record lows against the U.S. dollar in late September as the polls indicated a tightening race between Trump and Hillary Clinton ahead of the first presidential debate. The peso rose against the dollar during the first debate as Clinton appeared to gain momentum against Trump.

Ahead of the second presidential debate, the peso climbed more than 1.5 percent against the dollar after a leaked 2005 video of Trump's vulgar remarks about women stirred uproar around the Republican candidate's presidential campaign.

The peso-dollar then settled into a range, and as late as the morning of Oct. 28, markets seemed to have reached a broad complacency about the U.S. presidential election. Traders generally expected a market-friendly scenario of a Clinton win and Republican dominance in Congress, for continuation of the status quo with gridlock in the federal government.

That changed the afternoon of Oct. 28. A revelation from James Comey, director of the Federal Bureau of Investigation, that his agency is looking at new emails associated with Clinton increased concerns that Trump could win the election instead. The Mexican peso immediately dropped as much as 2 percent against the dollar and drifted lower in the following days.

But just two days before the election, Comey said in a letter to Congress that the bureau stands by its July conclusion that no criminal charges were warranted against Clinton for her use of a private server. The peso surged more than 2 percent against the greenback Monday to trade around its highest in nearly two weeks.