• The Mexican Peso fell over 8.0% in its key pairs last week as a result of election volatility. 
• The Peso further weakens after a speech by outgoing president Obrador argues radical reforms are required to cure endemic corruption. 
• USD/MXN keeps marching higher and now trades well above 18.00.  

The Mexican Peso (MXN) makes a marginal recovery on Monday after losing over 8.0% in the previous week in its most heavily traded pairs. The slight bounce is probably driven by bears covering their shorts and taking profits after the outsized move in the previous week. 

All the votes have been counted for the Mexican election and reveal that the Morena party has won a supermajority in the Congress, as expected, but are two seats short of one in the Senate. Morena and its allies won 372 of the 500 seats in the Congress and 83 of the 128 seats in the Senate, according to Reuters. 

The result will still enable President-elect Claudia Sheinbaum’s administration to push through a controversial package of reforms that are rattling markets and leading to a depreciation of the Peso. However, they will have to win over some opposition senators to get their reforms through both houses. 

USD/MXN is 18.34 at the time of writing, EUR/MXN is trading at 19.75 and GBP/MXN at 23.34.