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The Brazilian real led gains among
Latin American peers on Thursday supported by a softer dollar
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and improved global risk sentiment.
The U.S. dollar index that measures the greenback
against a basket of currencies, fell 0.6%, boosting regional
currencies.
The real gained 1.5%, while the index for
Latin American currencies added 1.2%.
So far this year, the real has advanced 7%, compared to the
8.8% decline in its emerging market peers.
“In the case of Brazil, we are seeing some resiliency in the
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currency, largely on the back of the cushion in terms of
monetary policy,” said Wilson Ferrarezi, economist at TS
Lombard.
Brazil’s presidential race has narrowed to a
4-percentage-point gap between front-runner Luiz Inacio Lula da
Silva and incumbent President Jair Bolsonaro, and they are now
statistically tied, according to a poll published on Wednesday.
“There is growing consensus that the electoral run off will
be very tight, but from a market perspective, both candidates
have pros and cons and there are some sectors that might benefit
more with one than with the other and vice versa,” added
Ferrarezi.
“Overall, the Brazilian markets will likely continue to
benefit going forward, probably because the inflationary
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pressures are finally beginning to subside.”
Oil producer Mexico’s peso rose 0.4% against the
dollar, also supported by a jump in crude prices in response to
tighter supplies and on news that China is considering a cut in
the duration of quarantine for inbound visitors.
Mexico’s economy likely stagnated in September after two
months of expansion, according to a preliminary estimate
provided by the national statistics agency.
Currencies of copper producers Chile and Peru
edged higher, supported by firm copper prices and a weaker
greenback.
Colombia’s peso was the only Latam currency in red in
early trading, down 0.5%.
Stocks in the Latam region advanced 1.9%.
Bolivia’s economy grew 4.1% year-on-year in the second
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quarter of 2022, its government said on Wednesday, indicating a
ramp-up in production and normalization of the economy following
the coronavirus pandemic.
Elsewhere in the EM, Turkey’s lira briefly hit a
record low after the central bank delivered a
bigger-than-expected 150 basis-point rate cut.
Key Latin American stock indexes and currencies at 0253 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 866.54 0.07
MSCI LatAm 2230.95 1.88
Brazil Bovespa 117156.10 0.76
Mexico IPC 46396.73 0.39
Chile IPSA 5096.80 0.18
Argentina MerVal 138919.93 1.785
Colombia COLCAP 1240.39 3.59
Currencies Latest Daily %
change
Brazil real 5.1962 1.47
Mexico peso 20.0319 0.34
Chile peso 970.9 0.20
Colombia peso 4847.05 -0.27
Peru sol 3.972 -0.01
Argentina peso 153.5000 -0.21
(interbank)
Argentina peso 287 1.74
(parallel)
(Reporting by Bansari Mayur Kamdar in Bengaluru; editing by
Diane Craft)