Mexican peso leads Latam FX lower as commodity declines, rate jitters weigh
Updated at 11:45 a.m. ET
Mexico GDP weakens, peso falls
Commodity currencies slip as China demand worries weigh
Mexican stocks on track for first rise in five sessions
Venezuela protests in focus
By Lisa Pauline Mattackal
July 30 (Reuters) -Mexico's peso led broader declines in Latin American currencies after weaker-than-expected economic data, while worries about commodity demand in China and caution ahead of a bevy of key central bank decisions weighed on sentiment.
Mexico's economy grew 0.2% in the second-quarter, where analysts had expected a rise of 0.4%.
Slowing growth in Latin America's largest economy fueled expectations for the central bank to cut interest rates at its August meeting, weighing on Mexico's peso MXN= which fell 0.8%to 18.7924 per dollar, its lowest in nearly seven weeks.
"Going forward, real activity is likely to face headwinds from high rates, post-election policy uncertainty, negative fiscal impulse, soft business confidence, and moderate external demand," economists at Goldman Sachs wrote.
Worries about commodity demand from China, the world's second-largest economy, also weighed on producers in Latin America, after there were no specific new stimulus efforts announced at the country's Politburo meeting.
Oil slumped to its lowest since June, while major metals including iron ore and copper also lost ground. MKTS/GLOBO/R
Trading was also cautious ahead of the U.S. Federal Reserve's policy decision on Wednesday, with investors watching for a dovish tone from policymakers to gauge whether market bets on a September rate cut are on the right track.
Chile's peso dipped 0.5% ahead of the scheduled start of Banco Central de Chile's policy meeting. The central bank is forecast to ease policy by 25 basis points.
Rate decisions from both Colombia and Brazil are also on deck tomorrow. Colombia is expected to ease policy from 11.25% to 10.75%, while Brazilian policymakers are expected to hold borrowing costs again.
Rate trajectories in the region highlight the challenges facing central banks in the region as they balance the need to boost economic growth with an uncertain global macroeconomic scenario and higher-for-longer rates in major developed economies such as the U.S.
The Colombian peso COP= lost 0.5% while Brazil's real BRL= was down 0.6%.
"A conservative central bank has kept the BRL's monetary fundamentals steady, but some risks emerge in H2 2024 if the BCB becomes structurally more dovish," said Thierry Wizman, global FX & rates strategist at Macquarie.
Currencies of copper producers fell, with Peru's sol PEN=PE down 0.1%, while Chile's peso CLP= briefly touched its lowest since May.
MSCI's indexes tracking the region's stocks .MILA00000PUS and currencies .MILA00000CUS fell 0.5% and 0.2%, respectively.
Local bourses were mixed, with Brazil's Bovespa .BVSP down 0.6% while Argentina's Merval .MERV slipped to a two-week low. Mexican stocks .MXX rose 0.8%, snapping five sessions of losses.
Commodity price declines dragged Brazil's Vale VALE3.SA and Petrobras PETR4.SA which lost 1.8% and 1%, respectively.
Venezuelan politics remained in focus, with protests spreading throughout the country after Nicolas Maduro was announced the winner of its presidential election despite the opposition claiming victory.
Venezuela's bonds USP97475AN0=1M, USP97475AJ9=1M were broadly steady after declines on Monday.
HIGHLIGHTS
** Ethiopia's IMF deal paves way for debt restructuring, official says
** Turks eye property investments abroad as domestic market loses appeal
** India markets regulator proposes slew of measures to curb options trading frenzy
Key Latin American stock indexes and currencies at 11:45 a.m. ET:
Latest | Daily % change | |
MSCI Emerging Markets .MSCIEF | 1071.77 | -0.51 |
MSCI LatAm .MILA00000PUS | 2169.65 | -0.45 |
Brazil Bovespa .BVSP | 126199.58 | -0.59 |
Mexico IPC .MXX | 52890.96 | 0.71 |
Chile IPSA .SPIPSA | 6486.10 | 0 |
Argentina MerVal .MERV | 1453926.78 | -1.844 |
Colombia COLCAP .COLCAP | 1337.63 | -0.23 |
Currencies | Latest | Daily % change |
Brazil real BRBY | 5.6496 | -0.44 |
Mexico peso MXN=D2 | 18.7924 | -0.88 |
Chile peso CLP=CL | 958.2 | -0.53 |
Colombia peso COP= | 4083.3 | -0.58 |
Peru sol PEN=PE | 3.7318 | -0.28 |
Argentina peso (interbank) ARS=RASL | 931.5000 | 0.05 |
Argentina peso (parallel) ARSB= | 1370 | 3.28 |
Caracas claw back https://reut.rs/46ng45C
Reporting by Lisa Mattackal in Bengaluru;
Editing by Marguerita Choy
Actifs liés
Dernières actualités
Avertissement : Les entités de XM Group proposent à notre plateforme de trading en ligne un service d'exécution uniquement, autorisant une personne à consulter et/ou à utiliser le contenu disponible sur ou via le site internet, qui n'a pas pour but de modifier ou d'élargir cette situation. De tels accès et utilisation sont toujours soumis aux : (i) Conditions générales ; (ii) Avertissements sur les risques et (iii) Avertissement complet. Un tel contenu n'est par conséquent fourni que pour information générale. En particulier, sachez que les contenus de notre plateforme de trading en ligne ne sont ni une sollicitation ni une offre de participation à toute transaction sur les marchés financiers. Le trading sur les marchés financiers implique un niveau significatif de risques pour votre capital.
Tout le matériel publié dans notre Centre de trading en ligne est destiné à des fins de formation / d'information uniquement et ne contient pas – et ne doit pas être considéré comme contenant – des conseils et recommandations en matière de finance, de fiscalité des investissements ou de trading, ou un enregistrement de nos prix de trading ou une offre, une sollicitation, une transaction à propos de tout instrument financier ou bien des promotions financières non sollicitées à votre égard.
Tout contenu tiers, de même que le contenu préparé par XM, tels que les opinions, actualités, études, analyses, prix, autres informations ou liens vers des sites tiers contenus sur ce site internet sont fournis "tels quels", comme commentaires généraux sur le marché et ne constituent pas des conseils en investissement. Dans la mesure où tout contenu est considéré comme de la recherche en investissement, vous devez noter et accepter que le contenu n'a pas été conçu ni préparé conformément aux exigences légales visant à promouvoir l'indépendance de la recherche en investissement et, en tant que tel, il serait considéré comme une communication marketing selon les lois et réglementations applicables. Veuillez vous assurer que vous avez lu et compris notre Avis sur la recherche en investissement non indépendante et notre avertissement sur les risques concernant les informations susdites, qui peuvent consultés ici.
