Most Latam FX down as China disappointment dents commodity prices
Updated at 10:30 a.m. ET/1430 GMT
Brazil's economic activity beats forecast in August
Rate decision in Chile later in the week
Latam stocks up 0.3%, FX adds 0.5%
By Shashwat Chauhan
Oct 14 (Reuters) -Most currencies of resources-rich Latin America slipped on Monday, as the lack of clarity on stimulus plans from top commodities consumer China dragged crude oil and base metal prices lower.
China pledged on Saturday to "significantly increase" debt to revive its sputtering economy, but left investors guessing on the overall size of the stimulus package.
Crude oil prices slipped more than 1%, while prices of base metals such as copper also tumbled due to a lack of detail on China's stimulus plans. O/R MET/L
Oil producer Mexico's peso MXN= slipped 0.5%, while Colombia's peso COP= held firm at 4207.44 in choppy trading.
Top copper producer Chile's peso CLP= was flat at 926.72 per dollar, while Peru's sol PEN=, the second largest producer of the red metal, shed 1.1%.
Later in the week, Chile's central bank is expected to lower its benchmark interest rate by 25 basis points to 5.25%, a poll of traders released by the bank showed.
The Brazilian real BRL= was flat at 5.6087 per dollar in turbulent trading. Brazil's economic activity again surprised on the upside in August, central bank data showed, reinforcing a view of heated economic momentum that has prompted policymakers to kick off a monetary tightening cycle last month.
"While the data is positive, indicating that Brazil's economic activity remains strong, it also reinforces the Central Bank's decision to raise interest rates during the last COPOM meeting," said Matheus Zani, FX risk manager at Deaglo.
Finance Minister Fernando Haddad said that the government might need to revise its economic growth forecast for this year again after bumping it up last month.
MSCI's index for Latin American currencies .MILA00000CUS was last up 0.5%, while stocks .MILA00000PUS added 0.3%.
Local bourses were mixed, with Argentina's Merval index .MERV up 0.8%, while the Mexican benchmark .MXX was down 0.6%.
Most EM assets ex-China saw modest moves last week as brimming geopolitical tensions in the Middle East and the continuous repricing of the U.S. Federal Reserve's interest rate path led to nervy trading.
Later in the week, a U.S. retail sales reading and jobless claims data could set the tone for market expectations around the Fed's rate path.
HIGHLIGHTS
** Brazil central bank director says strong activity has impacted inflation, expectations
** Panama to stick to economic targets despite budget backtrack, minister says
** China's exports miss forecasts as lone bright spot fades
Key Latin American stock indexes and currencies:
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1159.51 | 0 |
MSCI LatAm .MILA00000PUS | 2191.71 | 0.32 |
Brazil Bovespa .BVSP | 130024.84 | 0.03 |
Mexico IPC .MXX | 52063.55 | -0.63 |
Chile IPSA .SPIPSA | 6526.73 | -0.7 |
Argentina Merval .MERV | 1797829.82 | 0.832 |
Colombia COLCAP .COLCAP | 1326.48 | 1.25 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.6087 | 0.07 |
Mexico peso MXN= | 19.3505 | -0.49 |
Chile peso CLP= | 926.72 | -0.03 |
Colombia peso COP= | 4207.44 | 0.06 |
Peru sol PEN= | 3.7619 | -1.13 |
Argentina peso (interbank) ARS=RASL | 979.5 | -0.46 |
Argentina peso (parallel) ARSB= | 1155 | 2.16 |
Reporting by Shashwat Chauhan in Bengaluru, Editing by Nick Zieminski
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