Mexican Peso Plummets Amidst Electoral Reforms and U.S. Inflation

The Mexican peso weakened 1.5% following better-than-expected U.S. inflation data, reaching 18.8550 per dollar. Over the past week, it has faced significant volatility due to proposed constitutional reforms by Mexico's ruling party. The peso has weakened over 10% since the national elections on June 2.

The Mexican peso weakened 1.5% on Wednesday in volatile early trading, after better-than-expected U.S. inflation data, to stand at 18.8550 per dollar.

Mexican markets have endured a period of volatility due to concerns over proposed constitutional reforms by the ruling party after its thumping victory in the June 2 national elections. On Tuesday, the peso weakened 2.2% compared to Reuters' reference price, to 18.9770 units per dollar, a level not seen since March 2023. The currency pared back its losses later after data in the U.S. showed inflation flat in May.

Since Mexico's ruling Morena party outperformed expectations in the national elections, the peso has weakened more than 10%.