Brazil’s real led losses among major
Latin American currencies as investors braced for a large US
interest rate hike next week, while stocks declined more than 1%
on rising worries of a global economic slowdown.
Inflation in Brazil as measured by the IGP-10 price index
fell 0.90% in September, compared with a 0.69% drop
in August, firming the case for the central bank to end its
tightening cycle soon, as signaled.
Brazil’s real fell 0.5%, taking weekly losses
to 2.3% – its worst week since July.
On the political front, presidential hopeful Luiz Inacio
Lula da Silva leads incumbent Jair Bolsonaro by 12 points, a
poll showed ahead of Brazil’s Oct. 2 vote.
“There is a growing consensus that we may see more upside in
commodity prices again, which will benefit Brazil, despite the
fact that the election theme poses a risk,” said Christian
Lawrence, senior cross-asset strategist at Rabobank.
Mexico’s offshore peso inched 0.3% higher in
holiday-thinned trade. Mexican stock markets were shut for the
Independence Day holiday. Colombia’s currency slipped
“Latam is where you can start anticipating the end of a
policy tightening cycle sooner than elsewhere, though the
correlation with the Federal Reserve is also very strong,” said
Cristian Maggio, head of portfolio strategy and ESG at TD
The dollar was flat, less than 1% away from its highest in
to decades, ahead of a potentially huge US Fed rate hike next
Peru’s sol firmed 0.3%. Peru’s economy expanded 1.41%
in July compared with the year before, the government said,
feeling the effects of a slowdown in the key mining sector.
The July result brings year-on-year growth between January
and July to 3.22% in the world’s no. 2 copper producer.
Elsewhere, Argentina’s government budget for next year sees
the economy growing by a modest 2% with inflation dipping to a
still sky-high 60%, an official told reporters.
Brazil’s Bovespa fell 0.9%. Airline Gol Linhas
Aéreas Inteligentes SA fell 0.4% after US
authorities said the carrier will pay more than $41 million to
resolve parallel bribery investigations.
Key Latin American stock indexes and currencies at 1849 GMT:
Stock indexes Latest Daily %
MSCI Emerging Markets 944.21 -1.5
MSCI LatAm 2121.18 -0.94
Brazil Bovespa 108984.03 -0.88
Mexico IPC 46769.78 0.05
Chile IPSA 0.00 0
Argentina MerVal 145252.13 0.336
Colombia COLCAP 1192.68 -1.73
Currencies Latest Daily %
Brazil real 5.2661 -0.52
Mexico peso 20.0520 0.04
Chile peso 927.5 0.00
Colombia peso 4429.91 -0.39
Peru sol 3.8738 0.10
Argentina peso 143.5100 -0.22
(Reporting by Anisha Sircar and Amruta Khandekar in Bengaluru;
editing by Jonathan Oatis)