Most Latam currencies down as dollar firms on hope of smaller Fed cuts
Updated at 10:35 a.m. ET/ 1435 GMT
Brazil's real down despite central bank intervention
Mexico's peso set for near 6% monthly drop
Latam stocks flat, FX adds 0.2%
By Shashwat Chauhan
Aug 30 (Reuters) -Most Latin American currencies slipped on Friday, as the dollar firmed after data supported the likelihood of smaller interest rate cuts by the Federal Reserve, while the Mexican peso was an outlier.
The dollar index =USD perked up after data showed U.S. consumer spending rose in July, suggesting the economy strengthened early in the third quarter, lowering the chance of 50 basis point interest rate cut from the Fed next month.
The personal consumption expenditures (PCE) price index - the Fed's preferred inflation gauge - rose 0.2% last month after an unrevised 0.1% gain in June, the report also showed.
"This data keeps the Fed on path to a 25-basis point cut in September followed by additional 25 basis point cuts in November and December," said Greg Wilensky, head of U.S. fixed income at Janus Henderson Investors.
"However, a faster cutting path is certainly possible, including the chance of an initial 50 bps cut if next Friday's employment data comes in materially weaker than expected."
Brazil's real BRL= slipped 0.3%, on track for its eight straight monthly loss despite the country's central bank selling the entire $1.5 billion offered in a spot auction announced on Thursday.
Separately, central bank data showed Brazil's public sector overall deficit exceeded 10% of gross domestic product (GDP) in the 12 months through July, highlighting the fiscal challenges facing Latin America's largest economy.
Chile's peso CLP= dipped 0.2%, while Colombia's peso COP= eased 1%.
Mexico's peso MXN= bucked the trend to rise 0.7%, though it was set for a close to 6% monthly drop as worries about domestic judicial reforms and expectation of dovish central bank policy saw investors grow less positive on the currency.
Amongst equities, Brazil's Bovespa .BVSP dipped 0.4%, while the Mexican bourse .MXX slipped 0.3%.
MSCI's index for Latin American currencies .MILA00000CUS gained 0.2%, on track for marginal monthly losses, while a gauge for stocks .MILA00000PUS was flat, set for monthly advances.
Global equities saw sharp declines earlier this month as investors dumped risk assets after a July jobs report in the United States fanned worries of a recession in the world's biggest economy. The worries have faded as data throughout the month showed the resilience of U.S. consumers.
Adding to the volatility, a surprise rate-hike by the Bank of Japan earlier this month caused the yen JPY= to rise and a sharp unwinding of currency carry trades, where investors borrow in low-yielding currencies such as the yen to invest in high yielding assets like stocks.
High-yielding Latin American currencies saw sharp declines, but most have recovered as markets gear up for the Fed's expected interest rate cut next month, following Chair Jerome Powell's dovish tilt last week.
Markets in Peru were shut for a public holiday.
HIGHLIGHTS
** Brazil's jobless rate drops to 6.8% in quarter through July
** Chile's copper output, manufacturing production up in July
** Kenya's inflation rises slightly to 4.4% yr/yr in August
** Maldives bonds at record low after Fitch downgrade amid default concerns
Key Latin American stock indexes and currencies:
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1099.9 | 0.45 |
MSCI LatAm .MILA00000PUS | 2236.96 | 0.00 |
Brazil Bovespa .BVSP | 135449.54 | -0.44 |
Mexico IPC .MXX | 52969.78 | -0.32 |
Chile IPSA .SPIPSA | 6480.29 | 0.5 |
Argentina Merval .MERV | 1737835.65 | 4.68 |
Colombia COLCAP .COLCAP | 1337.51 | 0.16 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.6438 | -0.31 |
Mexico peso MXN= | 19.699 | 0.69 |
Chile peso CLP= | 914.02 | -0.19 |
Colombia peso COP= | 4152.43 | -0.99 |
Peru sol PEN= | 3.7485 | -0.22 |
Argentina peso (interbank) ARS=RASL | 950 | 0.052631579 |
Argentina peso (parallel) ARSB= | 1290 | 1.937984496 |
Major EM currencies this month https://tmsnrt.rs/4dI4FAa
Reporting by Shashwat Chauhan in Bengaluru; editing by Barbara Lewis
Asset collegati
Ultime news
Disclaimer: le entità di XM Group forniscono servizi di sola esecuzione e accesso al nostro servizio di trading online, che permette all'individuo di visualizzare e/o utilizzare i contenuti disponibili sul sito o attraverso di esso; non ha il proposito di modificare o espandere le proprie funzioni, né le modifica o espande. L'accesso e l'utilizzo sono sempre soggetti a: (i) Termini e condizioni; (ii) Avvertenza sui rischi e (iii) Disclaimer completo. Tali contenuti sono perciò forniti a scopo puramente informativo. Nello specifico, ti preghiamo di considerare che i contenuti del nostro servizio di trading online non rappresentano un sollecito né un'offerta ad operare sui mercati finanziari. Il trading su qualsiasi mercato finanziario comporta un notevole livello di rischio per il tuo capitale.
Tutto il materiale pubblicato sul nostro servizio di trading online è unicamente a scopo educativo e informativo, e non contiene (e non dovrebbe essere considerato come contenente) consigli e raccomandazioni di carattere finanziario, di trading o fiscale, né informazioni riguardanti i nostri prezzi di trading, offerte o solleciti riguardanti transazioni che possano coinvolgere strumenti finanziari, oppure promozioni finanziarie da te non richieste.
Tutti i contenuti di terze parti, oltre ai contenuti offerti da XM, siano essi opinioni, news, ricerca, analisi, prezzi, altre informazioni o link a siti di terzi presenti su questo sito, sono forniti "così com'è", e vanno considerati come commenti generali sui mercati; per questo motivo, non possono essere visti come consigli di investimento. Dato che tutti i contenuti sono intesi come ricerche di investimento, devi considerare e accettare che non sono stati preparati né creati seguendo i requisiti normativi pensati per promuovere l'indipendenza delle ricerche di investimento; per questo motivo, questi contenuti devono essere considerati come comunicazioni di marketing in base alle leggi e normative vigenti. Assicurati di avere letto e compreso pienamente la nostra Notifica sulla ricerca di investimento non indipendente e la nostra Informativa sul rischio riguardante le informazioni sopra citate; tali documenti sono consultabili qui.