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Peso Pounded As Political Risk Re-Emerges In Mexico

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The Mexican peso tumbled more than 1% this morning, more than every other major emerging-market currency except the South African rand.


Bloomberg reports that traders were anticipating a victory for the opposition Morena party in this weekend’s gubernatorial elections in the state of Mexico, according to Win Thin, Brown Brothers Harriman & Co.’s head of emerging markets in New York.


And the peso is back at one-week lows






Peso also hurt by negative sentiment towards emerging markets, as South

African President Jacob Zuma quashed a revolt in his own party, denting

optimism a more market-friendly leader will take over...




While hot money floods into EM bonds and stocks, Thin notes


"Markets got a wake-up call with regards to

EM political risk with South Africa, and may be re-pricing chances of a

negative outcome from this coming weekend’s state of Mexico elections"




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