Mexican President Andres Lopez Obrador (AMLO), who leaves office at the end of the month, is wasting no time when it comes to the controversial judicial reform, Commerzbank’s FX Analyst Antje Praefcke notes.

Peso is likely to remain under downward pressure

“It was passed yesterday without amendment by the Senate with more than the two-thirds majority required for constitutional amendments. Although the bill still has to be passed by more than half of Mexico's local congresses, this should only be a formality.”

“All in all, the law, which aims to ensure that judges of the Supreme Court and federal judges are elected by popular vote in future, ultimately undermining the division of power and extending the influence of the current regime, is likely to come into force before the end of the month.”

“AMLO's move undermines investor confidence in the regime. It is also questionable whether the law violates the North American Trade Agreement (USMCA). Under these conditions, the peso is likely to remain under downward pressure.”