Mexican Peso Plummets Amid Concerns Over Judicial Reform

The local currency lost ground, ending the day above the 20 pesos per dollar mark, in a market closely monitoring the Senate’s discussions on judicial reform.

The Mexican peso depreciated against the U.S. dollar on Tuesday. The local currency lost ground and finished the day above the 20 pesos per dollar threshold, as the market remained focused on the Senate’s discussions regarding judicial reform.

The exchange rate closed the day at 20.0911 pesos per dollar. Compared to Monday’s official closing rate of 19.8939, according to data from the Bank of Mexico (Banxico), this represented a loss of 19.72 cents for the peso, equivalent to a 0.99% decline. The dollar traded within a range of a high of 20.1352 pesos and a low of 19.8811 pesos. The U.S. Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, rose by 0.12% to 101.68 points.

Investors fueled the sell-off against the peso, driven by concerns over judicial reform and anticipation of the first debate between Donald Trump and Kamala Harris, set to take place tonight. The primary driver behind the peso’s movement is the Senate’s vote on judicial reform. There are reports that an opposition senator may vote in favor, which could lead to the approval of the changes tomorrow.

The judicial reform includes a proposal to elect judges, magistrates, and Supreme Court justices through a public vote, raising concerns among analysts about the potential weakening of checks and balances on the Executive branch.

Traders are also awaiting the first debate between U.S. presidential candidates Kamala Harris, representing the Democrats, and Donald Trump, the Republican candidate. Tomorrow, attention will shift to the release of U.S. consumer price data.