Latam currencies flat with Banxico minutes, Peru rate decision in focus
Peru's central bank expected to leave interest rates unchanged
Brazil's retail sales unexpectedly rise to record high in May
Latam stocks up 0.2%, FX off 0.3%
Kenyan president sacks cabinet, bowing to pressure from protests
Updated at 1535 GMT
By Johann M Cherian
July 11 (Reuters) -Most Latin American currencies hovered around the unchanged mark on Thursday, as investors stayed cautious ahead of an interest rate decision in Peru and assessed Banxico's monetary policy minutes.
MSCI's index tracking regional currencies .MILA00000CUS slipped 0.2% against a weakening dollar, after data showed that headline U.S. consumer prices unexpectedly fell in June.
However, the dollar's slip saw the Japanese yen JPY=EBS jump nearly 3%, its biggest daily surge since late 2022, raising questions about official buying of the Asian currency.
Back in resources-rich Latin America, Brazil's real BRL= slipped 0.3%, with traders assessing retail sales data that showed an unexpected rise to record highs, a day after data signaled moderating price pressures for consumers.
Markets also assessed the implications of a tax overhaul that the country's lower house approved, which aims to boost productivity by streamlining a tax system critics blame for burdening businesses with excessive costs.
"It is a good thing because in the past ... it was a web of taxes and it was so complicated that it discouraged a lot of economic activity," said Eduardo Ordonez Bueso, an emerging markets debt portfolio manager at BankInvest.
Separately, the country's Senate Committee postponed voting on a constitutional amendment proposal granting the central bank greater financial autonomy from the executive.
Concerns around Brazil's fiscal standing along with central bank independence have been among top reasons for the real trading near two-year lows following a recent plunge in value.
The Mexican peso .MXN= was flat after minutes from the local central bank's June monetary policy meeting showed the five-member governing board foresaw that the inflationary environment may allow for discussing further rate cuts at upcoming meetings.
Chile's peso CLP= and Peru's sol PEN= ticked up 0.2% and 0.8% respectively, with the currencies of both copper exporting countries hovering near one-month highs.
Focus was on an interest rate decision by the Peruvian central bank later in the day, where economists polled by Reuters see borrowing costs being held at 5.75%.
MSCI's index tracking regional equity indexes .MILA00000PUS climbed 0.2%, with Brazil's Bovespa .BVSP adding 0.7%, helped by industrial-related stocks.
Bourses in Mexico .MXX, Chile .SPIPSA and Argentina .MERV rose between 0.1% and 6%.
Elsewhere, the yield on Kenyan dollar bonds KE235478161= slipped over 12 basis points and the shilling EURKES= weakened 0.7% against the euro. President William Ruto fired his entire cabinet apart from the foreign minister, bowing to pressure from nationwide protests that have created the biggest crisis of his two-year presidency.
Key Latin American stock indexes and currencies:
Latin American market prices from Reuters | ||
Stock indexes | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1126.05 | 1.33 |
MSCI LatAm .MILA00000PUS | 2306.27 | 0.2 |
Brazil Bovespa .BVSP | 128193.37 | 0.77 |
Mexico IPC .MXX | 54419.47 | 0.26 |
Chile IPSA .SPIPSA | 6510.14 | 0.66 |
Argentina MerVal .MERV | 1691666.63 | 0.098 |
Colombia COLCAP .COLCAP | 1366.48 | 0.04 |
Currencies | Latest | Daily % change |
Brazil real BRBY | 5.4329 | -0.38 |
Mexico peso MXN=D2 | 17.8471 | -0.18 |
Chile peso CLP=CL | 910.1 | 0.57 |
Colombia peso COP= | 3966.65 | -0.04 |
Peru sol PEN=PE | 3.7683 | 0.05 |
Argentina peso (interbank) ARS=RASL | 919.5000 | -0.05 |
Argentina peso (parallel) ARSB= | 1435 | 1.05 |
Reporting by Johann M Cherian in Bengaluru; Editing by Mark Potter, Alexandra Hudson
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