Mexican peso, stocks fall on fears of ruling coalition super-majority in Congress

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Mexican peso, stocks fall on fears of ruling coalition super-majority in Congress

LONDON/NEW YORK -Mexican stocks fell over 6% and the peso lost as much as 4.3% to the dollar on Monday after the country's ruling party scored a surprisingly strong election showing and looked poised for a super-majority in Congress that markets fear might bring constitutional change and diminish checks and balances.

The Mexican peso earlier hit a fresh seven-week low of 17.754 to the dollar, a 4.29% drop, LSEG data showed. By 3:41 p.m. EDT , the peso was trading at 17.72 to the dollar, down 4.1%. Mexico's benchmark stock market index fell 6.2%, while the MSCI index, priced in dollars, dropped 9.8%. The iShares MSCI Mexico ETF was down 10.8%.

Sheinbaum, a climate scientist and former mayor of Mexico City, won the presidency with just shy of six votes in ten, with 82% of ballots counted, in what is set to be the highest vote percentage in Mexico's democratic history. Lopez Obrador said in a morning press conference on Monday that Mexico's finance minister, Rogelio Ramirez de la O, will remain in his post for some time to help facilitate the transition.

Throughout the course of his tenure, Lopez Obrador had doubled the minimum wage, reduced poverty and oversaw a strengthening peso and low levels of unemployment - successes that made him incredibly popular.

 

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