The Mexican Peso weakens after AMLO’s statements about reforms

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The Mexican Peso’s post-election sell-off gained fresh momentum on Friday on the back of comments from the outgoing President Andres Manuel Lopez Obrador (AMLO) during his daily morning press conference. 

It was essential to push through reforms of the judiciary and dissolve autonomous bodies, like the INAI – the government’s transparency agency – because, in the words of AMLO, “The judicial power is hijacked, the service is taken over by a minority of those at the top. I have already said it here, and they know it very well. It is even shameful, but there are ministers who are like employees of large corporations,” according to El Financiero. 

Inflation data, also out at the end of last week, was mixed, showing a rise in headline inflation to 4.69% YoY in May from 4.65% in April, but a fall in core inflation to 4.21% YoY from 4.37%. 

Technical Analysis: USD/MXN marches ever higher

USD/MXN – the value of one US Dollar in Mexican Pesos – pushes above the 18.00 mark and peaks at 18.46, close to the 18.49 of October 2023. 

USD/MXN Daily Chart 

The extension higher suggests the short and intermediate-term trends are bullish, and given that “the trend is your friend”, the price is likely to continue rising. 

The pair is now close to touching the key resistance level at 18.49, the October 2023  highs. A break above that level will probably see it go even higher, with the next target potentially situated at 19.22 (March 2023 high).

The long-term trend is probably still bearish, suggesting moderate background risks continue. 

Source: El Financiero

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