FX.co ★ Mexican peso nosedives to its lowest level since November 2023

The Mexican peso is once again under pressure. The currency has plummeted to its lowest level since November 2023. What a setback!

On June 4, the peso resumed its downtrend that began after the recent presidential election in the country. Last week, the currency lost 1.7%. Since the beginning of 2024, the Mexican peso has shed as much as 4% to settle at 17.5 per dollar, its lowest level since November 2023.

Claudia Sheinbaum of the National Regeneration Movement (Morena), won a landslide victory in the presidential race. The country also held congressional elections, in which Mexico's ruling Morena party once again secured a super-majority.

According to Reuters, Sheinbaum's victory was widely anticipated. However, markets were not prepared for her party's dominance in both chambers of Congress. Investors expressed concern that the new president could push through a number of controversial constitutional reforms she had previously proposed. Against this backdrop, Mexico's benchmark stock index dropped by 6.1%, and the MSCI Mexico index, priced in dollars, plunged by 8.8%.

The Mexican peso has once again become the worst-performing currency globally, Bloomberg noted. "The Mexican peso now has the highest implied volatility among 16 main currencies and the second highest among all 31 major currencies tracked by Bloomberg, trailing only the Russian ruble," the agency highlighted.

Remarkably, just a few weeks ago, the Mexican peso was one of the few emerging-market currencies to show impressive strength against the US dollar in 2024.