Latam FX, stocks cling to gains after Fed rate cut
U.S. Fed cuts by 25 bps
Mexican President Sheinbaum has cordial first call with Trump
Economists see higher peak for Brazil's rates
Argentina's Milei to meet with Trump next week in US
MSCI's Latam stocks index up 0.8%, FX up 1.1%
Updated at 2:44 p.m. ET
By Ankika Biswas and Johann M Cherian
Nov 7 (Reuters) -Most Latin American currencies and stocks logged strong gains against a weak dollar on Thursday, as investor sentiment improved with the Federal Reserve's latest interest-rate cut, while Mexico's peso hit a two-week high.
MSCI's Latam currencies index .MILA00000CUS rose 1.1% to an over three-week high. The dollar =USD weakened after Wednesday's biggest one-day jump in over two years as investors closed out profitable bets following Donald Trump's presidential victory, with bets of a Fed rate cut also weighing.
"Latin American central banks typically aim to follow the Fed's monetary policy to avoid negative impact on currency markets. Lower U.S. interest rates are likely to facilitate a smoother path for rate reductions in Latam," said Eduardo Moutinho, market analyst at financial technology firm Ebury.
The U.S. central bank delivered a widely expected 25-basis-point cut, as policymakers acknowledged an easing job market and improving inflation trend.
However, traders have trimmed their bets of future rate cuts on consistently robust economic data and after accounting for chances of higher inflation stemming from Trump's proposed tariffs and government spending.
Mexico's peso MXN= appreciated 1.1% to 19.86 against the dollar, while local stocks .MXX also gained nearly 0.9% to an over two-week high.
The peso had hit more than two-year lows of 20.8 and the stocks index hit a one-year low on Wednesday after Trump's comeback sparkedfears that he could follow through on campaign rhetoric around trade and immigration barriers that would hurt the Mexican economy.
The peso ended Wednesday's choppy session flat, with some analysts pointing to investors having already priced in Trump's win. The currency had lost nearly 21% from April highs in the run-up to Nov. 5.
"We remain optimistic about the peso. Mexico stands out as a strong currency in the region, and the peso's future will partly depend on whether Trump can effectively implement proposed tariffs," Moutinho added.
Further, Mexican President Claudia Sheinbaum spoke with Trump this morning, describing the telephone call as "very cordial".
Colombia's peso COP= was the top gainer among its regional peers, up 2.5% to a two-week high, tracking an over 1% jump in crude oil prices.
Top copper producer Chile's peso COP= and Peru's sol PEN= climbed 1.2% and 0.7%, respectively, boosted by an over 3% jump in prices of the red metal.
While Peru's interest-rate decision is due later in the day, a Reuters poll showed Chile is expected to cut rates by 25 bps in December.
On the flip side, Brazil's real was largely flat, a day after Copom hiked interest rates by 50 basis points and left the door open for further increases.
In contrast to the monetary policy easing by other Latam central banks, Brazil's recent rate hike prompted economists to raise their projections for borrowing costs at the end of its tightening cycle.
Meanwhile, Argentina's libertarian President Javier Milei, a political ally of Trump, will meet with U.S. president-elect next week in the United States.
The country's main stocks index .MERV climbed nearly 2%, hitting a fresh record high, with the MSCI Latam stocks gauge .MILA00000PUS rising 0.8%.
Key Latin American stock indexes and currencies:
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1142.12 | 0.91 |
MSCI LatAm .MILA00000PUS | 2163.82 | 0.78 |
Brazil Bovespa .BVSP | 129720.18 | -0.48 |
Mexico IPC .MXX | 52177.02 | 0.86 |
Chile IPSA .SPIPSA | 6562.93 | -0.25 |
Argentina Merval .MERV | 2014963.18 | 1.94 |
Colombia COLCAP .COLCAP | 1354.21 | -0.74 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.682 | -0.05 |
Mexico peso MXN= | 19.863 | 1.1 |
Chile peso CLP= | 948.8 | 1.2 |
Colombia peso COP= | 4300.86 | 2.52 |
Peru sol PEN= | 3.75 | 0.69 |
Argentina peso (interbank) ARS=RASL | 993.5 | -0.05 |
Argentina peso (parallel) ARSB= | 1100 | 3.18 |
Reporting by Johann M Cherian and Ankika Biswas in Bengaluru; Editing by Barbara Lewis and Lisa Shumaker
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.
