Mexican peso leads Latam FX higher as Omicron concern ebbs

Most Latin American currencies steadied

on Tuesday, supported by an easing of concerns about the Omicron

variant and a calmer dollar, while Mexico’s peso led gains as

the country’s stock index hit record highs.

MSCI’s index of Latin American currencies

inched 0.3% higher, in a fifth consecutive session of gains.

Latam currencies are set to end December higher after

dropping for three consecutive months. Strong commodity prices,

waning Omicron worries and hawkish central bank decisions to

curb rising inflation pressures have all helped emerging market

currencies in the region.

Global markets rose, buoyed by another record-setting day on

Wall Street and after Britain and France held off from imposing

more COVID curbs before the year-end.

“The good news is that the global economy is on track to

extend and entrench recovery; as re-opening of borders fires up

tourism-related multipliers and scope for de-congestion of

supply-chains greases industrial activity. But the recovery path

is likely to be bumpy,” analysts at Mizuho Bank wrote in a note.

The currency of oil-exporting Mexico gained 0.5%,

tracking strong gains in crude oil prices, which are around the

$80 per barrel mark. The peso is on-track to be the best

performing currency among its Latin American peers this month,

up nearly 4%.

Mexican stocks rose 0.6% to an all-time high.

Brazil’s real, was flat after the jobless rate

fell more than expected to 12.1% in the three

months through October, statistics agency IBGE said, signaling

an improving economy.

Economy Ministry officials have forecast that a rebounding

labor market will strengthen the economy next year, but market

economists are trimming their 2022 growth outlooks because of

sharp increases to interest rates in response to double-digit

inflation.

Brazilian stocks dropped 0.6%, with miner Vale

the biggest drag on the index. A group representing two-thirds

of bondholders in Brazilian miner Samarco, a joint venture

between BHP Group and Vale, rejected a restructuring

offer put forward by the company, though both sides are expected

to offer fresh proposals.

Other Latin American currencies including the Chilean peso

steadied, while the Colombian and Argentine

pesos and the Peruvian sol eased between 0.1% and 0.4%.

Key Latin American stock indexes and currencies at 1450 GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1227.26 0.45

MSCI LatAm 2114.48 -0.03

Brazil Bovespa 104930.43 -0.59

Mexico IPC 53168.77 0.6

Chile IPSA 4293.43 0.27

Argentina MerVal 84808.65 0.269

Colombia COLCAP 1410.14 0.39

Currencies Latest Daily %

change

Brazil real 5.6370 0.00

Mexico peso 20.5770 0.46

Chile peso 855 0.22

Colombia peso 4000.6 -0.10

Peru sol 3.9868 -0.42

Argentina peso 102.6100 -0.06

(interbank)

(Reporting by Shashank Nayar in Bengaluru; editing by Barbara

Lewis)