Mexican Peso bulls were nowhere to be found during Monday’s trading session, despite Manuel Lopez Obrador securing a landslide victory in the presidential elections over the weekend.
Although the local currency initially rallied following Obrador’s presidential win, gains were relinquished thanks to an appreciating Dollar and trade war fears. While Obrador’s victory may ease concerns of political instability, there still remains a thick smog of uncertainty over Mexico’s economic outlook. With negations to update the NAFTA agreement in a deadlock and global trade tensions heavily eroding risk appetite, the Mexican Peso remains vulnerable to further downside losses. It must be kept in mind that June was a cruel trading month for emerging market currencies and if this negativity rolls over into July, this could translate to more pain for EM currencies including the Mexican Peso.