Latam FX poised for weekly declines, Chile's peso hits two-month low
Most Latam currencies set for weekly losses
Petrobras and Vale ink fuel supply deal
Argentina posts $981 mln trade surplus in September
Chile central bank cuts rate 25 bps, sees more easing ahead
Latam FX off 0.1%, stocks gain 0.3%
Updated at 2018 GMT
By Shashwat Chauhan and Johann M Cherian
Oct 18 (Reuters) -Most Latin American currencies slipped on Friday, and were set for weekly losses, while Chile's peso weakened to levels seen more than two months ago, after the local central bank lowered interest rates as expected.
Chile's peso CLP= depreciated 0.8%, extending previous session's declines, after the domestic central bank cut its benchmark interest rate by 25 basis points to 5.25%, extending an easing cycle since the middle of last year, and predicted further cuts ahead.
"A further 25 bps cut in December is still far from guaranteed. Better GDP figures, higher public spending and eventual intensification of external risks could justify a technical pause, said Aníbal Alarcon, senior economist at Scotiabank.
Currencies of oil exporters Mexico MXN= and Colombia COP= dipped 0.2% and 0.4%, respectively, tracking weakness in crude prices. O/R
Mexico's peso briefly breached the barrier of 20 per dollar in the last session and has seen the steepest declines among peers this week on signs that Republican candidate Donald Trump's chances for a second term in the White House were improving.
Analysts say Trump's policies on trade, security and immigration could have a negative impact on the region's second-largest economy.
Still, U.S. Ambassador to Mexico Ken Salazar said that there was no pause in the strong relations between the Mexican government and the U.S. embassy in the country.
Brazil's real BRL= depreciated 0.6%, tracking weakness in iron ore prices. The currency was headed for a third straight weekly decline as concerns around the country's fiscal stability prevailed.
Peru's sol PEN= climbed 0.4%, tracking a rebound in copper prices, a main export from the country, after top consumer China unveiled new measures to boost liquidity in the local stock market. MET/L
MSCI's index for Latin American currencies .MILA00000CUS slipped 0.1%, while a gauge for stocks .MILA00000PUS added 0.3%, though both were set for weekly losses.
Latin American assets remained under pressure all through this week as investors bet on more stimulus measures from China to aid its faltering property sector, with some recent announcements failing to meet the expectations.
Brazil's Bovespa .BVSP slipped 0.2% weighed by industrial stocks.
Petrobras PETR4.SA has agreed to sell diesel with renewable content to Vale VALE3.SA, in a deal that might also include the supply of other low-carbon fuels going forward. Their stocks trended lower 0.5% and 0.3%, respectively.
Equities in Mexico .MXX, Colombia .COLCAP and Chile .SPIPSA rose over 1% each.
Argentine equities .MERV added 1.2%. The embattled country posted a trade surplus of $981 million in September, official date showed.
EM equities saw their first weekly outflow in 20 weeks in the week till Wednesday, while debt saw inflows for the fifth straight week, according to a report by Bank of America.
Key Latin American stock indexes and currencies:
Latin American market prices from Reuters | ||
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1154.82 | 1.73 |
MSCI LatAm .MILA00000PUS | 2180.03 | 0.32 |
Brazil Bovespa .BVSP | 130495.63 | -0.23 |
Mexico IPC .MXX | 53009.5 | 1.04 |
Chile IPSA .SPIPSA | 6643.52 | 1.09 |
Argentina Merval .MERV | 1823855.58 | 1.235 |
Colombia COLCAP .COLCAP | 1362.07 | 1.17 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.6907 | -0.64 |
Mexico peso MXN= | 19.8903 | -0.29 |
Chile peso CLP= | 953.47 | -0.78 |
Colombia peso COP= | 4262.23 | -0.43 |
Peru sol PEN= | 3.7502 | 0.39 |
Argentina peso (interbank) ARS=RASL | 980.5 | 0.05 |
Argentina peso (parallel) ARSB= | 1205 | 1.24 |
Reporting by Shashwat Chauhan and Johann M Cherian in Bengaluru; Editing by Susan Fenton and Alistair Bell
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