GBP/MXN Exchange Rate Subdued as Brexit Uncertainty Rises
The Pound Mexican Peso (GBP/MXN) exchange rate is stuck close to its worst levels since January this morning as the collapse of cross-party talks gives rise to further political uncertainty in the UK.
At the time of writing the GBP/MXN exchange rate is virtually unchanged from the day’s opening rate, leaving the pairing stuck at around MXN24.4586.
Pound (GBP) Muted as Brexit Pessimism Rises
The Pound (GBP) is stuck trading close to multi-month lows this morning following the news that the cross-party Brexit talks have come to an end, without the two sides managing to reach an agreement.
Labour called a close to the talks on Wednesday, saying in a letter to the PM that negotiations ‘have gone as far as they can’ and that the party could no longer continue discussions due to the ‘the increasing weakness and instability’ of the government.
This comes swiftly following the announcement that Theresa May will set out a timetable for her resignation early next month, with the PM expected to step down by the end of June.
GBP investors were unsurprisingly disappointed by the collapse of the talks as it makes highly unlikely that any deal put fourth before parliament would be likely to garner enough support to pass.
Mexican Peso (MXN) Flat as Trade Concerns Mount
At the same time, the Mexican Peso (MXN) is struggling to find momentum today, amidst rising concerns that the US-China trade talks could be in jeopardy.
This follows a report from Chinese state media that Beijing believes that further trade talks with Washington maybe pointless.
This unsurprisingly has many investors spooked this morning, leading them to shy away from more risk-sensitive currencies such as the Peso.
GBP/MXN Exchange Rate Forecast: EU Elections to Soften Sterling?
Looking ahead, the Pound Mexican Peso (GBP/MXN) exchange rate could face further losses next week as political uncertainty in the UK could be exacerbated by the EU elections taking place on Thursday.
The elections are viewed by many as a stand-in for a for a second Brexit referendum, something which could leave GBP investors disappointed if a strong showing by the Brexit party, should lend support to those calling for a no-deal Brexit.
Meanwhile for MXN investors the focus is set to remain on US-China trade tensions, with demand for the Peso likely to be determined by market risk appetite.