• Mexican Peso on backfoot as Congress votes on controversial judicial reform.
• Morena’s supermajority is expected to pass the bill to the Senate, where they don’t have the majority.
• Mexico’s Unemployment Rate rises in July, reflecting economic weakness.

The Mexican Peso registered losses for the second straight day against the Greenback, yet it has recovered some ground. The USD/MXN fell from around 19.98 after the release of the US Institute for Supply Management (ISM) Manufacturing PMI report. The USD/MXN trades at 19.85 and gains some 0.30% at the time of writing.

Political turmoil in Mexico weighs on the Mexican currency as Congress prepares to vote for the judicial reform, which, according to foreign governments, workers of the Mexican court system, and multinational companies, if approved, could threaten democracy and open the door for criminal organizations to infiltrate the courts.

It is expected that Morena’s supermajority will approve the bill at the Chamber of Deputies. However, in the Senate, Morena remains slightly short of achieving the majority needed to modify the Constitution.

Regarding this, a judge granted a stay over the weekend to prevent debate on the proposal. The initiative has sparked a strike in the judicial sector, strained relations with the United States, and shaken local markets amid widespread doubts it generates.

In July, Fitch Ratings commented that it could negatively affect Mexico's investment appetite.

In addition, President Andres Manuel Lopez Obrador has also pushed bills to abolish autonomous bodies, such as the antitrust regulator and the Transparency Institute.