Investing.com – The Mexican peso came under pressure as it neared a recent peak of 18.60 in overnight trade in Asia. The move comes after Mexican President-elect Claudia Sheinbaum announced that judicial reform will be one of the first topics of the new congress in September.
The peso has already weakened 8% on concerns that the Morena party, which did well in recent elections, may introduce constitutional reforms that could negatively impact the market. This potential program is expected to be received unfavorably by North American investors, possibly causing the value of the peso to fall further as markets open today.
Analysts at ING had long been bullish on the peso but said they would now be cautious.
Analysts also said the hugely popular long trade could face further challenges this Friday when the Bank of Japan meets to set policy. No rate change is expected, but officials could give some clues about the timing of the start of tightening, when the Bank of Japan’s monthly purchases of JGBs could be cut from 6 trillion yen to 5.5 trillion yen or even 5.0 trillion yen. This could help the yen.
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