Mexico's peso hits one-month low, leads declines among Latam FX
America Movil pursues SpaceX deal, after strong third quarter
Brazil to extend fiscal rules' lifespan, says Haddad
Argentina's trade surplus nears $16 billion under Milei
Chile rate decision on Thursday
Latam stocks down 0.2%, FX off 0.6%
Updated at 2028 GMT
By Shashwat Chauhan and Johann M Cherian
Oct 16 (Reuters) -Mexico's peso hit a one-month low on Wednesday and led declines among currencies in Latin America, while a rebound in copper prices helped gains in top exporter Chile's peso.
Mexico's peso MXN= depreciated 1.2%, having fallen more than 3% this week against a stronger dollar, as investors priced in a likelihood of Republican candidate Donald Trump in the White House, just weeks away from pivotal U.S. Presidential elections.
The former president has proposed to impose tariffs of more than 200% on vehicles imported from the region's second-largesteconomy, one of the engines of Mexicaneconomic activity.
Further, Trump'spolicies to cut taxes and ease financial regulations could stoke inflation pressures and rattle the U.S Federal Reserve's monetary easing cycle, thereby increasing appetite for the greenback.
However, Paul Donovan, Chief Economist at UBS Global Wealth Management said, "U.S. and European investors have viewed proposed tariffs as a bargaining device, not to be taken seriously. However, the repeated theme of trade taxes implies the policy is important."
Iron ore exporter Brazil's real BRL= slipped 0.2% after falling 1% in the last session, as prices of the base metal fell on the prospect of weakening global demand. IRONORE/.
With the country's high level of spending under scrutiny, Finance Minister Fernando Haddad said the region's biggest economy aims to ensure the longevity of its fiscal rules with a set of spending control measures to be announced this year.
However, yield on sovereign bonds BR2YT=RR, BR5YT=RR, BR10YT=RR rose over 20 basis points each.
Bucking the trend, the world's biggest copper producer Chile's peso CLP= appreciated 1%, as prices of the red metal rebounded after the market stabilized at a technical support level. MET/L
Later in the week, Chile's central bank is expected to lower its benchmark interest rate by 25 basis points to 5.25%.
Fellow copper producer Peru's sol PEN= was flat, while Colombia's peso COP= dipped 0.2%, to touch a one-month low.
Uncertainty over the magnitude of stimulus from leading commodities consumer China has added to expectations of reduced demand, pressuringcurrencies in the region. An index tracking Latin American currencies .MILA00000CUS fell 0.6%.
Traders are pricing the Federal Reserve to cut rates in November by a smaller 25 basis points, further aiding the dollar's gains. OnThursday, U.S. retail sales reading and jobless claims data could set the tone for market expectations around the Fed's rate path.
A gauge for local stock indexes .MILA00000PUS was down 0.2%, although Brazil's Bovespa .BVSP added 0.5% helped by communication services stocks.
Mexico's main index .MXX added 0.2% with America Movil AMXB.MX jumping 3.2% after it more than tripled its net profit in the third quarter from a year ago. The telecommunications giant is also exploring an agreement with Elon Musk's SpaceX.
Argentina's MerVal index .MERV slid 2%. The country likely had a trade surplus for the tenth straight month in September under libertarian President Javier Milei.
Key Latin American stock indexes and currencies:
Latin American market prices from Reuters | ||
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1143.72 | -0.52 |
MSCI LatAm .MILA00000PUS | 2185.58 | -0.17 |
Brazil Bovespa .BVSP | 131668.32 | 0.48 |
Mexico IPC .MXX | 52503.03 | 0.24 |
Chile IPSA .SPIPSA | 6542.64 | -0.25 |
Argentina Merval .MERV | 1776060.51 | -2.213 |
Colombia COLCAP .COLCAP | 1337.26 | 0.63 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.6606 | -0.18 |
Mexico peso MXN= | 19.9179 | -1.19 |
Chile peso CLP= | 933 | 1 |
Colombia peso COP= | 4256.66 | -0.25 |
Peru sol PEN= | 3.7622 | 0.05 |
Argentina peso (interbank) ARS=RASL | 980 | 0.00 |
Argentina peso (parallel) ARSB= | 1200 | 2.92 |
Reporting by Shashwat Chauhan and Johann M Cherian in Bengaluru; editing by Barbara Lewis and Alistair Bell
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