Brazil’s real, Chilean peso push Latam FX higher

Gains in Chile’s peso and Brazil’s real

helped support an index of Latin American currencies on Monday

with the peso recovering after its worst weekly drop since

mid-November, while Latam stocks firmed for the fifth straight

session.

The gains in the peso, which led a rise across most

emerging market currencies in holiday-thinned trade, came after

it lost 2.4% last week mainly due to fears over the economic

direction likely to be adopted by leftist Gabriel Boric after

his victory in the presidential run-off election.

The currency of Latin America’s largest economy, Brazil

, firmed 0.7% and an index of Latin American

currencies rose 0.3%.

However, other currencies in the region fell with those of

oil-exporting nations, Mexico and Colombia down

0.2% and 0.5% despite stronger oil prices. The Argentine peso

lost 0.2%.

The peso had hit a five-week high on Friday last week,

primarily on stronger oil prices, but analysts painted a bleak

picture for Mexican economic growth after weak third-quarter

economic growth data on Friday.

“We have become more concerned about the negative inertia in

some sub-sectors, especially within services, and believe

downward risks to our 5.0% GDP (gross domestic product) growth

estimate for the year have increased,” said Citigroup

strategists in a note.

Latin American stocks gained 0.9% with Wall

Street’s S&P 500 set to end at record highs, but

coronavirus concerns weighed, with several airlines across the

globe canceling flights on fears about the spread of the

Omicron variant.

Turkey’s lira dropped after rocketing more than 50%

from record lows last week when new measures were unveiled to

contain its free fall.

Peru’s sol inched 0.3% higher, while concerns about

copper production at MMG Ltd’s Las Bambas copper mine

in the country kept gains in check. Peru is the world’s

second-largest producer of copper.

An index of EM stocks rose. China shares ended

steady, while most shares in emerging Europe, Middle East,

Africa rose.

Chile stocks led gains among some of the major indices, up

about 1%

Key Latin American stock indexes and currencies at 1936 GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1222.13 0.13

MSCI LatAm 2119.29 0.91

Brazil Bovespa 105601.87 0.68

Mexico IPC 53206.46 0.67

Chile IPSA 4281.89 0.95

Argentina MerVal 84853.39 0.004

Colombia COLCAP 1401.41 -0.02

Currencies Latest Daily %

change

Brazil real 5.6364 0.73

Mexico peso 20.7085 -0.52

Chile peso 856.9 0.82

Colombia peso 3996.6 -0.23

Peru sol 3.97 0.37

Argentina peso 102.5400 -0.22

(interbank)

(Reporting by Susan Mathew and Shashank Nayar in Bengaluru;

Editing by Aditya Soni and Philippa Fletcher)