Newly elected Mexico's President Andres Manuel Lopez Obrador addresses his supporters after winning general elections. Photo: AFP/Pedro Pardo

On Sunday, Mexican voters handed a decisive victory to a leftist nationalist politician who has vowed to stand up to a US president he has described as “erratic and arrogant.”

Andres Manuel Lopez Obrador’s expected victory has rattled markets in recent months on fears that he will nationalize huge swaths of the economy, among other nationalist policy proposals. But in the immediate aftermath of his victory, the peso spiked versus the dollar.

The currency erased its gains when news started streaming in that a majority for his party in Congress might be swept into power along with him, but the markets were clearly sold on the new president’s message that he will water down his more radical policy prescriptions.

Amlo, as he is known, also struck a more conciliatory tone in his rhetoric with the US President Donald Trump. While relations with the US were far from the most important issue, friction with Trump has colored the campaign and allowed Mexican candidates to draw a contrast with current President Enrique Pena Nieto’s perceived inability to stand up to Trump’s confrontational rhetoric.

Expect Amlo’s pledge in his victory speech that he will seek “friendly relations” with the US to be short-lived. He also stressed that a new type of relations between the US and Mexico should be “rooted in mutual respect and in defense of our migrant countrymen who work and live honestly in that country,” in an apparent reference to Trump’s controversial campaign rhetoric which often plays up criminal elements in immigrant populations.

“Listen, Trump! Saying Yes to a New Start for Mexico, Saying No to a Wall,” read the cover of a recent book published by Amlo, highlighting the emphasis the new president places on confronting Trump.

It is unclear whether Amlo will be tempted to test his mandate – he earned an incredible 52% of the vote – by trying to push through some of his most radically left-wing policy proposals.

But it is clear that he will take a hard line with Trump, unlike Pena Nieto. There are a variety of areas, including on security and border enforcement, in which Amlo can pressure the Trump administration. For instance, Mexico could refuse to accept migrants back into the country without proof of Mexican citizenship, or loosen controls on its southern border to allow more to flow north.

Any such escalation might also risk a vicious circle as Trump’s confrontational attitude with Mexico and calls for stronger border enforcement energize his base more than any other issue.

Along with Amlo, Trump – who cites personal rapport with other leaders as the key to bilateral relations – expressed a desire to get off on the right foot in a tweet. It may not last much longer than this first day.