Peso Weakens on Global Liquidity Squeeze; EM FX Most Exposed Outside Asia

The Mexican peso is falling sharply, attributed to a global liquidity contraction that disproportionately hits emerging-market currencies most traded outside Asia. The report suggests the peso's outsized decline reflects its role as a liquid EM currency, but the specific trigger and magnitude of the liquidity shift remain unclear. This matters as sustained peso weakness could pressure Mexican inflation and complicate Banxico's policy path.