Latam FX drop as risk aversion prevails amid macroeconomic worries
Vale sees iron ore output at high-end of 2024 guidance
Brazil Senate committee delays vote on c.bank financial autonomy
Mexico's America Movil falls after reporting Q2 loss
Updated at 3:15 p.m. ET/ 1915 GMT
By Johann M Cherian
July 17 (Reuters) -Brazil's real and the Chilean peso led declines among Latin American currencies on Wednesday, as uncertainty around fiscal stability, interest rates and a possible second term for U.S. President Donald Trump dampened risk appetite.
MSCI's index tracking Latin American currencies .MILA00000CUS slipped 0.9%, despite the global weakening of the dollar, which saw other currencies, including Japan's yen JPY= and UK's sterling GBP=, appreciate sharply. USD/
Colombia's peso COP= was last down 0.2% after falling as much as 1% during the day with concerns around fiscal stability of the oil producer remaining a pain point for investors.
Brazil's real BRL= slipped 1% as prices of iron ore, a top export, slumped to a nearly three-week low, undermined by weak seasonal demand from top consumer China and mounting global supply. [IRNORE/]
Separately, a Senate committee delayed the analysis of a conservative-backedconstitutional amendment proposal that would grant financial autonomy to the central bank, but is opposed by President Luiz Inacio Lula da Silva's government.
Worries of political interference in central bank policy making had sparked a real sell-off in late June.
Mexico's peso MXN= dropped 0.3%, while Chile's peso CLP= fell about 1.5%.
Investors mulled the possible repercussions on U.S. trade with the region, along with migration and security if Trump were to return to the White House.
"We're in a moment of adjustment. You have to think about the stability of the United States, as well as how that feeds into Latin America down the line," said Juan Perez, director of trading at Monex USA.
"The Joe Biden administration has allowed for a lot of free trade flow, but if it's more controlled (under Trump) and more towards trying to drive American exports, then that puts a lot of negative pressure on Latin America."
Meanwhile, MSCI's gauge tracking regional bourses .MILA00000PUS dropped 1%, and was down over 13% year-to-date as regional central banks continue to wait for the U.S. Federal Reserve to kick off its monetary policy easing cycle.
Brazil's Bovespa .BVSP inched up 0.4 limited by Vale's VALE3.SA about 1% loss, despite the mining giant expressing confidence that it would reach the high-end of its 2024 guidance for iron ore production after output increased in the second-quarter.
Mexico's main stock index .MXX lost 1.4%, with America Movil AMXB.MX falling over 1% after the telecommunications giant fell short of analyst projections and swung to a net loss in the second quarter.
Key Latin American stock indexes and currencies:
Latest | Daily % change | |
MSCI Emerging Markets .MSCIEF | 1112.01 | -0.48 |
MSCI LatAm .MILA00000PUS | 2302.99 | -1.01 |
Brazil Bovespa .BVSP | 129588.86 | 0.37 |
Mexico IPC .MXX | 53581.07 | -1.45 |
Chile IPSA .SPIPSA | 6558.73 | -0.11 |
Argentina MerVal .MERV | 1523012.61 | -0.213 |
Colombia COLCAP .COLCAP | 1367.41 | -0.46 |
Currencies | Latest | Daily % change |
Brazil real BRBY | 5.4840 | -1.01 |
Mexico peso MXN=D2 | 17.7105 | -0.27 |
Chile peso CLP=CL | 923.7 | -1.71 |
Colombia peso COP= | 3987.5 | -0.23 |
Peru sol PEN=PE | 3.7125 | -0.34 |
Argentina peso (interbank) ARS=RASL | 922.5000 | 0.05 |
Argentina peso (parallel) ARSB= | 1435 | -2.09 |
Reporting by Johann M Cherian and Shashwat Chauhan in Bengaluru; Editing by Alistair Bell and Aurora Ellis
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