Most Latam currencies rise as Trump's Treasury pick softens dollar
Corrects typographical error in headline
Mexico c.bank policy meeting minutes due on Thursday
Yamandu Orsi wins Uruguay's presidential election
Latam FX up 0.48%, stocks add 0.14%
By Shashwat Chauhan, Pranav Kashyap
Nov 25 (Reuters) - Latin American currencies saw a boost on Monday, as the global rally of the dollar paused and U.S. Treasury yields dipped following the nomination of Wall Street veteran Scott Bessent as Treasury Secretary by President-elect Donald Trump.
Trump said late on Friday he would nominate prominent investor Bessent as U.S. Treasury Secretary, which sent the greenback and Treasury yields lower, giving a leg up to emerging market assets.
"Bessent is generally viewed as a fiscal conservative, has been relatively transparent on his current economic views, offering greater visibility than some of the alternative candidates that were being floated for the role," Goldman Sachs analysts noted.
Some strategists said his nomination was a relief as he understands markets and his appointment could reduce the chance of severe tariffs.
"The choice of Bessent as Treasury secretary seems to have allayed major fiscal concerns," said James Reilly, senior markets economist at Capital Economics.
Mexico's peso MXN= was up 0.6%against the dollar as the greenback weakened globally, while Colombia's peso COP= advanced 0.8%.
Minutes from the Mexican central bank's last policy meeting, where it had cut interests rates by 25-basis-points, are scheduled to be released on Thursday.
Brazil's real BRL= slipped 0.1%to 5.80 per dollar. Investors in Latin America's biggest economy are on the lookout for the government to announce a fiscal package with budget cuts for the next years any time soon.
The government's delay in announcing a fiscal package has weakened the real, as investors hold back, awaiting clearer direction.
Kimberley Sperrfechter, Capital Economics' emerging markets economist, said that with the government showing no clear willingness to "tighten their belts", fiscal risks in Brazil are likely to remain elevated for the foreseeable future.
Copper producer Chile's peso CLP= led gains in the region, up 1.1% against the dollar after falling for the last three sessions, as prices of the red metal rebounded. MET/L
Argentina's peso ARS= lost 0.1%.
The government of libertarian President Javier Milei made a commitment to get its economy back on track, which is facing high levels of poverty at a time of massive state cutbacks.
Latin American assets have run into turbulence in November as investors mull the implications of Trump's policies on trade, tariffs and immigration, with key trading partners such as Mexico bearing the brunt of the pressure.
Continued repricing of the Federal Reserve's interest rate path has also helped the dollar globally, weakening EM currencies.
Minutes from the Fed's most recent policy meeting, where it opted to cut interest rates by 25 basis points, are due to be released on Tuesday.
MSCI's index for Latin American currencies .MILA00000CUS was up 0.48%, while a gauge for stocks .MILA00000PUS added 0.1%.
Over the weekend, official results showed center-left opposition candidate Yamandu Orsi secured victory in Uruguay's presidential election, with 99% of votes tallied, in a second-round race that pollsters expected to be closely fought.
Elsewhere in emerging markets, the Bank of Israel left interest rates unchanged for the seventh straight meeting, saying inflation remains high but that military conflicts are keeping economic growth weak. The shekel ILS= was last up 1.3% against the dollar.
HIGHLIGHTS
** Mexico posts third-quarter current account surplus of $733 million
** Brazil posts $5.9 billion current account deficit in October
Key Latin American stock indexes and currencies:
Stock indexes | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1092.76 | 0.5 |
MSCI LatAm .MILA00000PUS | 2084.69 | 0.14 |
Brazil Bovespa .BVSP | 129188.12 | 0.05 |
Mexico IPC .MXX | 50226.3 | -0.4 |
Chile IPSA .SPIPSA | 6549.16 | -0.23 |
Argentina MerVal .MERV | 2207699.85 | -0.19 |
Colombia COLCAP .COLCAP | 1398.06 | 0.44 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.8082 | -0.12 |
Mexico peso MXN= | 20.2727 | 0.63 |
Chile peso CLP= | 975.5 | 1.13 |
Colombia peso COP= | 4381.4 | 0.82 |
Peru sol PEN= | 3.773 | 0.37 |
Argentina peso (interbank) ARS=RASL | 1,006.0 | -0.15 |
Argentina peso (parallel) ARSB= | 1,110.0 | 2.2 |
Reporting by Shashwat Chauhan and Pranav Kashyap in Bengaluru; Editing by Alistair Bell and Chizu Nomiyama
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