Mexican peso leads Latam FX lower as dollar strengthens

Reuters

Mexican peso leads Latam FX lower as dollar strengthens

2024 8월 26, 오후 9:17 GMT

<html xmlns="http://www.w3.org/1999/xhtml"><head><title>EMERGING MARKETS-Mexican peso leads Latam FX lower as dollar strengthens</title></head><body>

Brazil's Petrobras jumps after MS upgrade

Mexico's ruling bloc confirmed supermajority in lower house

Victor Rodriguez tapped as next Pemex CEO

Latam stocks up 0.3%, FX down 0.3%

Updated at 2010 GMT

By Shashwat Chauhan and Lisa Pauline Mattackal

Aug 26 (Reuters) -Most Latin American currencies slipped on Monday as the dollar regained some footing after hitting multi-month lows last week, with Mexico's peso leading declines after ruling party Morena secured a supermajority in parliament.

The U.S. dollar recovered ground after slipping in the previous session after Federal Reserve Chair Jerome Powell on Friday said "the time has come" to lower interest rates.

The dollar index gained 0.2%, pressuring Latin American currencies. MSCI's index tracking regional currencies against the dollar .MILA00000CUS lost 0.3%.

Mexico's peso MXN=D3 slipped 1.8% to 19.428 per dollar after a rise of more than 2% on Friday, as investors remained wary of local political developments.

Mexico's electoral authority on Friday confirmed that ruling party Morena and its allies will hold a two-thirds supermajority in the lower house but fall just short of that level in the Senate when the new legislative term begins in September.

The Morena party intends to approve the first part of a series of constitutional changes proposed by outgoing President Andres Manuel Lopez Obrador including a reform of the judiciary that has rattled markets.

The dollar also caught a bid as investors sought safer assets as worries rose around escalating conflict in the Middle East, after militant group Hezbollah and Israel exchanged missiles.

"There appears to be a mild risk-off undertone to trading today as investors react to the heightened tensions around Israel (and) Lebanon over the weekend," said Shaun Osborne, chief FX strategist at Scotiabank.

However, he noted that "USD gains are mild and do not alter the trajectory of the dollar index, even from a short-term point of view."

Indeed, the LatAm currency index is on track for its best month since December, despite a steep sell-off in risk assets at the start of the month.

Copper producer Chile's peso CLP= ticked 0.3% higher as prices of the red metal rose, supported by a rebound in demand in China and on hopes of a U.S. rate cut in September. MET/L

Brazil's real BRL= and Colombia's peso COP= were little changed.

Brazil posted a larger-than-expected current account deficit in July, driven by an increase in the services account shortfall.

Among equities, Brazil's Bovespa .BVSP added 0.9%, boosted by a jump of over 7% jump in Petrobras PETR4.SA after brokerage Morgan Stanley upgraded its rating.

The state-owned oil firm was on track for its best day in nearly two years.

MSCI's index for regional stocks .MILA00000PUS rose 0.3%, and is also on track for monthly gains.

Elsewhere, Mexico's incoming president tapped academic Victor Rodriguez to be the next top executive of oil giant Pemex.

HIGHLIGHTS

** S&P downgrades Kenya's rating to 'B-' on weaker fiscal and debt trajectory

** Brazil's central bank needs to be more cautious due to strong economy, director says

** Nigerian economy grows over 3% in Q2 as oil output rises

Key Latin American stock indexes and currencies:

MSCI Emerging Markets .MSCIEF	1104.28	0.33
MSCI LatAm .MILA00000PUS	2299.15	0.27
Brazil Bovespa .BVSP	136888.71	0.94
Mexico IPC .MXX	53189.08	-0.56
Chile IPSA .SPIPSA	6442.64	-0.32
Argentina Merval .MERV	1593002.53	-0.869
Colombia COLCAP .COLCAP	1343.93	0.97

Currencies	Latest	Daily % change
Brazil real BRL=	5.5005	-0.26
Mexico peso MXN=	19.428	-1.75
Chile peso CLP=	905.36	0.29
Colombia peso COP=	4022.84	-0.03
Peru sol PEN=	3.7292	-0.12
Argentina peso (interbank) ARS=RASL	949	-0.263435195
Argentina peso (parallel) ARSB=	1330	1.503759398