Mexican Peso Volatility Amid Judicial Reforms and Economic Uncertainty

The Mexican peso briefly dipped below the 20-peso per dollar mark due to economic uncertainties in the U.S. and Mexico's ongoing judicial reforms. The currency market reacted to the Mexican government's push to elect judges by popular vote and recent U.S. job market data, weakening the peso.

The Mexican peso breached the 20-peso per dollar barrier briefly on Thursday, reflecting investor jitters over economic uncertainties in the U.S. and Mexico's controversial judicial reforms. By the end of the session, the peso recovered slightly to 19.9820 per dollar, falling 0.29% from earlier levels.

Mexico's lower house of Congress greenlit a judicial reform the previous day, setting the stage for the popular election of judges. This move has unsettled financial markets, heightening concerns about investment security under the new system envisioned by President Claudia Sheinbaum's administration.

The peso, already down 17% since last June's election, faced additional pressures from data showing a decline in U.S. job openings, suggesting economic cooling in Mexico's primary trade partner. Adding to the turbulence, a Bank of Japan official signaled further interest rate hikes, casting doubt on future peso-supporting carry trade operations.

(With inputs from agencies.)