Mexican peso continues slide, other Latin American currencies also slip

Updated at 03:21 p.m. ET/1921 GMT

By Sruthi Shankar and Shristi Achar A

June 17 (Reuters) –The Mexican peso slipped on Monday on concerns about the fallout from judicial reforms proposed by President-elect Claudia Sheinbaum, while other currencies in Latin America weakened as U.S. Treasury yields rose on stronger-than-expected data.

The peso has so far slumped about 9% since a resounding election win early this month for the country’s ruling party, with the latest leg lower coming as Sheinbaum said that judges in the country should be elected.

Mexico enacted two controversial laws on Friday that increase the president’s ability to grant amnesty and limit judges’ ability to suspend public projects.

The currency was down 0.5%at 18.54 per dollar.

“While we acknowledge the potential political consequences, we think the macro impact will be more limited than is feared by markets today,” noted Emiel Van Den Heiligenberg, head of asset allocation at Legal and General Investment Management.

“The government is still seen as fiscally conservative and the central bank as hawkish. The central bank is not under attack. This is what matters most for currency markets when the dust settles.”

Other currencies and stock markets in the region .MILA00000PUS came under pressure as U.S. Treasury yields extended gainsafter a better-than-expected reading on New York State factories in June. US/

The Brazilian real BRBY slid almost 0.8% ahead of the central bank’s interest rate decision on Wednesday, when policymakers are expected to pause its easing cycle amid unanchored inflation expectations.

Private sector economists in Brazil expect the country’s central bank to keep interest rates on hold at 10.50% at least until the end of this year, a weekly central bank poll showed.

“Resuming the easing cycle will likely require a combination of improved balance of risks for inflation, friendlier services inflation dynamics, lower inflation expectations, and possibly, also a friendlier external backdrop,” strategists at Goldman Sachs said in a note.

The Chilean peso CLP= dipped nearly 0.5%as the price of copper, the country’s top produce, dipped to its lowest level in more than eight weeks on weak industrial data from top consumer China. MET/L

Meanwhile,Peru’s economy is set to grow more than previously estimated this year, expanding around 3.5% due to a boost in investments, Prime Minister Gustavo Adrianzen said.

Key Latin American stock indexes and currencies:

Reporting by Sruthi Shankar and Shristi Achar in Bengaluru; Editing by Paul Simao and Marguerita Choy