• Mexican Peso slips as investors worry about the potential approval of controversial judiciary reforms, which could increase political risks.
• Morena's supermajority in Congress heightens fears of constitutional changes, leading to greater concentration of power and higher risk premiums.
• Dovish comments from Banxico Deputy Governor Galia Borja add pressure.

The Mexican Peso begins the week on the back foot, reversing most of last Friday’s gains. Losses of over 1.80% are seen in the Peso amid fears that the Mexican Congress could approve the Judiciary Reform bill and dovish comments from Deputy Governor Galia Borja. At the time of writing, the USD/MXN trades at 19.42 after bouncing off a daily low of 19.08.

Last Friday, the Instituto Nacional Electoral (INE) approved the Morena ruling party's supermajority in the Mexican Congress, raising investors' concerns that approving controversial changes to the Mexican Constitution could increase the country’s risks.

This is one of Monday's main drivers of USD/MXN price action. Now that Morena controls the lower house, the risks of the judiciary reform being approved have heightened, weighing on the Mexican Peso. Some analysts cited by El Financiero asserted that constitutional changes could lead to a greater concentration of power in the executive and impact the state of law.

Last week, Morgan Stanley recommended to its clients not to invest in shares in Mexico, citing fears that the judiciary reform could increase risk premiums in the country.