Mexico’s Morena party polls show support for judiciary reform

Source Fxstreet
Jun 17, 2024 20:15
  • Polls commissioned by MORENA indicate 80% support for judicial reform and 70% for electing Supreme Court judges.
  • Nearly 90% favor an independent judicial watchdog; around 40% believe many judges and magistrates are corrupt.

Mexico’s President-Elect Claudia Sheinbaum revealed that polls commissioned by the ruling party, Morena, supported the popular election of Supreme Court judges.

Claudia Sheinbaum said, “These polls are information, they don't have another objective,” and added, “This is just information to be considered in the discussions that will start in the coming days.”

Sheinbaum commented that she would hold talks with elected senators and deputies on Tuesday and compromised public forums to discuss the plan.

According to Reuters,” Some 70% backed the popular election of Supreme Court judges, and nearly 90% supported an independent judicial watchdog to probe possible misdeeds or corruption. Around 40% said they believed most judges, magistrates and ministers were corrupt.”

The polls jointly surveyed some 3,855 people between June 14-16 with margins of error of just under 3%.

USD/MXN Reaction

The pair trades at around 18.53, slightly above the 18.50 figure, consolidated. A daily close above the latter could pave the way for further gains. Otherwise, the USD/MXN would likely remain at around 18.35-19.00.

Mexican Peso FAQs

The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity.

The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN.

Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate.

As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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