• Mexican Peso on defensive as political turmoil deepens, ignoring foreign investors.
• AMLO’s judicial overhaul bill passes Mexico’s lower house, awaiting Senate approval amid fierce opposition.
• USD/MXN trades in 19.67-19.92 range with political uncertainty overshadowing US JOLTS impact.

The Mexican Peso depreciated against the Greenback on Wednesday during the North American session as the Mexican lower house voted and approved President Andres Manuel Lopez Obrador's (AMLO) bill to overhaul the judicial system. At the time of writing, the USD/MXN traded at 19.85, rising over 0.30%.

Mexico’s political turmoil continued on Wednesday. After more than 17 hours of discussion, Morena’s ruling party and its allies approved AMLO’s bill with 357 votes in favor and 130 against. Now it’s the turn of the Senate, where Morena is one vote short of what’s needed to pass the bill into law as part of the Mexican Constitution.

Although foreign governments, workers of the Mexican court system, and international companies expressed concerns that the reform threatened the rule of law, Mexico’s Chamber of Deputies approved it.

It is worth noting that on Tuesday, the US Ambassador in Mexico, Ken Salazar, expressed that the approval of the judiciary reform could damage relations between Mexico and the United States.

Despite that, as traders digested the latest US JOLTS report, the USD/MXN remains anchored in the middle of the 19.67-19.92 range. Job openings in July fell to their lowest level in three-and-a-half years, sparking speculation that the US Federal Reserve (Fed) might cut rates by 50 basis points (bps) at the upcoming September meeting.

According to the CME FedWatch Tool, odds for a 50 bps Fed rate cut are at 43%; while for a quarter of a percentage point,  57%.

Ahead this week, the US economic docket will feature the release of the ADP National Employment Change, Initial Jobless Claims, S&P and ISM Services PMI data, and the Nonfarm Payrolls (NFP) report on Friday.