The Mexican Peso is edging lower amid investor concerns the government will pass through a controversial judicial reform bill.
Rumors an opposition senator has crossed the floor and will vote with the government are weighing.
USD/MXN continues rising in a bullish channel.
The Mexican Peso (MXN) trades marginally lower on Tuesday, maintaining the steady bear trend established in its key pairs since April. The Peso is weakening amid investor concerns the government will successfully vote through a controversial judicial reform bill in the country’s upper house, the Senate.
MXN is also facing pressure following the release of lower inflation data for August, which increases the chances the Bank of Mexico (Banxico) will cut interest rates at its next meeting. This would be negative for the Peso as lower interest rates reduce foreign capital inflows.
On the upside, the Peso could be finding support from long-term geopolitical shifts amid deeper global trade fragmentation, after former President Donald Trump threatened to impose tariffs on countries who refuse to trade in the US Dollar (USD) if he is elected as President. Such a move, however, could place Mexico in a strong position as an intermediary.
Over recent days, Trump has recovered after lagging in opinion polls ahead of a key televised presidential debate with rival US Vice President Kamala Harris, scheduled for Tuesday.
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