Mexican peso still under pressure, other Latin American currencies also slip
By Sruthi Shankar
June 17 (Reuters) -The Mexican peso slipped on Monday on concerns about the fallout from judicial reforms proposed by President-elect Claudia Sheinbaum, while other currencies in Latin America weakened as U.S. Treasury yields rose on stronger-than-expected data.
The peso has so far slumped about 9% since a resounding election win early this month for the country's ruling party, with the latest leg lower coming as Sheinbaum said that judges in the country should be elected.
Mexico enacted two controversial laws on Friday that increase the president's ability to grant amnesty and limit judges' ability to suspend public projects.
The currency was down 0.3% at 18.51 per dollar.
"While we acknowledge the potential political consequences, we think the macro impact will be more limited than is feared by markets today," noted Emiel Van Den Heiligenberg, head of asset allocation at Legal and General Investment Management.
"The government is still seen as fiscally conservative and the central bank as hawkish. The central bank is not under attack. This is what matters most for currency markets when the dust settles."
Other currencies and stock markets in the region .MILA00000PUS came under pressure as U.S. Treasury yields rose after a better-than-expected reading on New York State factories in June.
The Brazilian real BRBY slid 0.8% ahead of the central bank's interest rate decision on Wednesday, when policymakers are expected to pause its easing cycle amid unanchored inflation expectations.
Private sector economists in Brazil expect the country's central bank to keep interest rates on hold at 10.50% at least until the end of this year, a weekly central bank poll showed.
The Chilean peso CLP= dipped 0.9% as the price of copper, the country's top produce, dipped to its lowest level in more than eight weeks on weak industrial data from top consumer China. MET/L
Key Latin American stock indexes and currencies:
Latest | Daily % change | |
MSCI Emerging Markets .MSCIEF | 1073.70 | -0.3 |
MSCI LatAm .MILA00000PUS | 2140.31 | -1.31 |
Brazil Bovespa .BVSP | 118865.02 | -0.67 |
Mexico IPC .MXX | 52038.19 | -0.35 |
Chile IPSA .SPIPSA | 6497.40 | -0.32 |
Argentina MerVal .MERV | 1582372.02 | -1.423 |
Colombia COLCAP .COLCAP | 1387.69 | 0.7 |
Currencies | Latest | Daily % change |
Brazil real BRBY | 5.4236 | -0.79 |
Mexico peso MXN=D2 | 18.5146 | -0.33 |
Chile peso CLP=CL | 939.7 | -0.86 |
Colombia peso COP= | 4150.98 | -0.55 |
Peru sol PEN=PE | 3.7853 | -0.14 |
Argentina peso (interbank) ARS=RASL | 903.0000 | -0.06 |
Reporting by Sruthi Shankar in Bengaluru; Editing by Paul Simao
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