The Mexican peso depreciated to above 20 against the US dollar on Monday, before strengthening to close just below the 20. As the U.S. presidential election draws near, it is expected to remain unstable.
A growing possibility of Donald Trump winning the Nov. 5 presidential election in the United States is the apparent reason for the weakening of the peso, after it ended last week at 19.88 to the dollar.
Trump has promised to impose significant tariffs on cars manufactured in Mexico and to renegotiate the USMCA if he is re-elected to the White House next January.
Another reason for the decline is Mexico’s recent change of leadership. Last month, the nation appointed a new President, Claudia Sheinbaum. Since her inauguration, Sheinbaum has caused friction in judicial circles, which her critics claim is hurting the Mexican economy.
Tony Payan, executive director of the Center for the U.S. and Mexico at Rice University’s Baker Institute for Public Policy, stated that Mexico is entering a “constitutional crisis.” He took to X, saying, “She’ll (Sheinbaum) willfully fall in contempt of court after a federal judge orders congressional approval of the dismantling of the judicial branch halted due to legislative procedural violations.”
The peso was previously trading at around 17 to the dollar before Sheinbaum’s Morena party won its convincing election victory, putting them in a solid position to put forward a range of constitutional reforms.
Today the Mexican peso sits at 19.87.
By CEO NA Editorial Staff
