MEXICO CITY, July 28 Reuters Mexico39;s peso on Friday hit its highest level against the dollar since early December 2015, as the greenback lost steam after a slowdown in U.S. inflation bolstered the case for the Federal Reserve to end its interest rate hikes.

The currency, which has been dubbed the super peso in some quarters, including by its most prominent cheerleader, President Andres Manuel Lopez Obrador, strengthened by more than 1.3 in morning trading to 16.63 per dollar.

What39;s happening with the peso right now is due to weakness in the dollar, but also because of optimism surrounding the Mexican peso, said Banco Base analyst Gabriela Siller.

And with this international investors keep buying Mexican pesos and it may keep appreciating, she added.

Data pointing to softening U.S. inflation on the one hand and betterthanexpected growth data on the other has helped weaken the dollar and boost the peso, which could continue firming to 16.40 to the dollar, Siller said.

In a research note this week, JPMorgan analysts wrote that while the peso has been considered a highbeta risk proxy currency for much of the past two decades, we think it is time investors shed this outdated perception.

The peso has entered a new chapter that will likely be accompanied by lower for longer volatility and a decoupling from the risk profile of its peer currencies in Latin America, they forecast in the note called MXN Not your padre39;s peso.

Some analysts have warned that a…