Most Latin American currencies slide as global risk aversion prevails
By Shashwat Chauhan
Nov 21 (Reuters) -Most Latin American currencies slipped on Thursday as investors avoideddipping into risky assets amid elevated geopolitical tensions between Russia and Ukraine, with Brazil's real leading losses in the region.
Ukraine said Russia fired what appeared to be an intercontinental ballistic missile at the city of Dnipro, in what would be the first use in war of a weapon designed to deliver long-distance nuclear strikes.
Western officials, who spoke on condition of anonymity, later told Reuters their initial analysis showed it was not an intercontinental ballistic missile, though they left open the possibility that conclusion could change.
This comes after Ukraine fired U.S. and British missiles at targets inside Russia this week despite warnings by Moscow that it would see such action as a major escalation.
"Traders may eye the promise of peace in 2025 to buy "dips" coming from renewed 'nuclear' concerns, or from the (unlikely) prospect of a 'forever war'," said Thierry Wizman, global FX & rates strategist at Macquarie.
Mexico's peso MXN= slipped 0.4% to 20.3436 per dollar, while Colombia's peso COP= edged 0.3% higher in light volumes, likely helped by elevated crude oil prices.
Late on Wednesday, Mexico's lower house of Congress approved a measure to abolish most of the autonomous bodies that regulate some economic sectors and ensure government transparency, a reform that could worsen tensions with the U.S. and hit credit ratings.
The measure is among the constitutional reforms presented in February by former President Andres Manuel Lopez Obrador, and backed by current President Claudia Sheinbaum, aimed at cutting public spending by centralizing the state apparatus.
Brazil's real BRL= dropped 0.6% in catch-up trade after a local holiday on Wednesday, leading losses in the region.
The Brazilian government's chief of staff said that the writing of a highly anticipated fiscal package is expected to be concluded this week, but President Luiz Inacio Lula da Silva is yet to decide the details and the date of an announcement.
Most Latin American currencies have declined lately as the dollar remained resurgent globally on expectations the Federal Reserve would slow its pace of monetary easing.
Uncertainty over the impact of U.S. President-elect Donald Trump's policies on immigration, trade and tariffs has pressured Latin American assets, particularly close trading partners like Mexico.
MSCI's gauge for Latin American currencies .MILA00000CUS slipped 0.5%, while the stocks index .MILA00000PUS fell 1%.
Regional heavyweight Brazil's benchmark .BVSP dropped close to 1% in catch-up trade after Wednesday's public holiday, while Mexico's bourse .MXX was flat.
Elsewhere in emerging markets, South Africa's central bank opted for another small cut to its main interest rate, bringing the repo rate down to 7.75%, while Turkey's central bank held its policy rate steady at 50%, as widely expected.
HIGHLIGHTS
** Brazil's federal tax revenue posts another strong performance in October
** Brazil police to accuse ex-president Bolsonaro in alleged 2022 coup plot, sources say
** Mexico Sep retail sales rise 0.1% from Aug
Key Latin American stock indexes and currencies:
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1086.01 | -0.72 |
MSCI LatAm .MILA00000PUS | 2059.85 | -0.98 |
Brazil Bovespa .BVSP | 126953.91 | -0.97 |
Mexico IPC .MXX | 50194.19 | 0.05 |
Chile IPSA .SPIPSA | 6588.98 | 0.19 |
Argentina Merval .MERV | 2169628.72 | 1.102 |
Colombia COLCAP .COLCAP | 1388.2 | 0.14 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.8054 | -0.57 |
Mexico peso MXN= | 20.3436 | -0.44 |
Chile peso CLP= | 969.8 | 0.31 |
Colombia peso COP= | 4375.01 | 0.28 |
Peru sol PEN= | 3.793 | 0.13 |
Argentina peso (interbank) ARS=RASL | 1003.5 | -0.05 |
Argentina peso (parallel) ARSB= | 1110 | 2.25 |
Reporting by Shashwat Chauhan in Bengaluru; Editing by Alistair Bell
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
