Monday, November 28

Brazil’s real rise in choppy trading; other EM FX mixed on growth worries


Article content

The Brazilian real rose on Monday

After President-elect Luiz Inacio Lula da Silva said fiscal

Article content

Responsibility was equally important as spending to improve the

The country’s economy, while its regional peers were mixed on growth

worries after COVID-19 flare-ups in China.

After climbing as much as 1.6%, the real was last up

0.3% in volatile trading against the dollar, gaining for the

second straight day.

The currency and the stock index Bovespa have

slumped 2.2% and 5.9%, respectively, this month as investors

Advertisement 2

Article content

fretted about the state of Brazil’s public accounts after Lula’s

incoming administration proposed exempting some 175 billion

reais ($32.51 billion) from the spending cap on next year’s

budget to pay for welfare programs.

However, the leader of Lula’s Workers Party said in the

lower house on Friday that the transition team could include a

new fiscal framework commitment in a proposed constitutional

amendment.

“The markets are still in a bit of a wait-and-see mode over

Brazil,” said Rachel Ziemba, founder, Ziemba Insights.

“It’s clear that the market is reluctant to give him the

benefit of the doubt. People are waiting to see exactly what

Lula policy will look like.”

Among other Latin American currencies, Mexico’s peso

Advertisement 3

Article content

and Chile’s peso were down 0.2%, while Colombia’s peso

climbed 1% even as the prices of their top exports, oil

and copper, dipped on demand concerns from China.

Officials across several Beijing districts urged residents

of areas hit hardest by COVID to stay home, as cases in China’s

capital as well as nationwide ticked higher. With China’s COVID

curbs already dragging on growth, this could further slow

economic recovery.

China’s yuan slipped 0.6%, while MSCI’s index of

emerging market shares dropped 1.4% after a three-week

winning streak.

The safe-haven greenback rebounded 0.8% on Monday

after a sharp fall in recent weeks on hopes of smaller interest

rate hikes by the Federal Reserve.

Among stocks, power company Copel surged 23.6%

Advertisement 4

Article content

After the Brazilian state of Parana sought to turn the state-run

utility into a firm with dispersed ownership and no controlling

shareholder.

Key Latin American stock indexes and currencies at 1523 GMT:

Stock indexes Latest Daily % change

MSCI Emerging Markets 929.98 -1.38

MSCI LatAm 2156.23 -0.85

Brazil Bovespa 108884.69 0.01

Mexico IPC 51569.72 0.41

Chile IPSA 5271.09 1.43

Argentina MerVal 157253.60 1.285

ColombiaCOLCAP 1246.03 -2.86

Currencies Latest Daily % change

Brazil real 5.3668 0.13

Mexico peso 19.4680 -0.17

Chile peso 943.1 -0.22

Colombia peso 4948.6 0.72

Peru sol 3.8182 -0.01

Argentina peso (interbank) 163.1700 -0.23

Argentina peso (parallel) 302 1.66

(Reporting by Devik Jain in Bengaluru; Editing by Alex

Richardson)

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.



financialpost.com

Leave a Reply

Your email address will not be published. Required fields are marked *