Colombian peso hits one-year low, other Latam FX steady
Foreign debt financing by Brazilian issuers surges in 2024
Mexico's Alsea down after quarterly results
MSCI's Latam stocks index down 0.3%, FX flat
Updated at 2012 GMT
By Shashwat Chauhan, Johann M Cherian and Pranav Kashyap
Oct 23 (Reuters) -Most Latin American currencies were steady against a stronger dollar on Wednesday, while oil exporter Colombia's peso depreciated to levels seen more than a year ago, tracking weaker crude oil prices.
MSCI'S index tracking currencies in the region .MILA00000CUS was flat, as the U.S. dollar continued its rise to hit a three month high with investors factoring in a measured pace of interest rate cuts by the Federal Reserve and upcoming U.S. elections. FRX/
Colombia's peso COP= weakened 1.5% to 4,325.34 to the dollar as prices of crude oil, a top export commodity, fell over 1%. Markets also weighed upcoming interest rate cuts by the local central bank and excessive fiscal spending plans for the upcoming year.
The local stock index .COLCAP lost 1.7%, pressured by rising yields on 5-year and ten-year bonds CO5YT=RR, CO10YT=RR.
Brazil's real BRL= was muted. The director of international affairs of Brazil's central bank, said that inflation expectations in the region's largest economy have been consistently higher than the monetary authority's target.
Most countries in Latin America have been on the path to lower borrowing costs, however Brazil is on track to lift local interest rates further by over 200 basis points due to persistent price pressures.
Concerns about the country meeting its 2024's fiscal targets and central bank independence on monetary policy have weighed on the real that is down nearly 15% this year.
"The policy rate differential between Brazil and the U.S. should improve by 300-400 bps... we would expect any improvement in confidence around fiscal policy to support both Brazilian bonds and (real)," said Michael Arno, portfolio manager & senior research analyst at Brandywine Global.
Copper producer Chile's peso CLP= inched up 0.1%, while Peru's sol PEN= was flat.
On the flip side, Mexico's peso MXN= appreciated 0.6% with all eyes on the U.S. vote on Nov. 5 as prediction markets favor a second Donald Trump presidency. His polices are seen as unfavorable to the region's second-largesteconomy.
On the equities front, a gauge for regional bourses .MILA00000PUS shed 0.3%, with Brazil's Bovespa .BVSP down 0.7%.
Azul AZUL.N lost over 3%. The carrier is in talks with multiple parties to raise about $400 million in fresh capital via debt financing.
Foreign debt financing by Brazilian issuers is surging again, reaching a three-year high in 2024, as local companies seek to refinance existing obligations or make new investments.
Mexican stocks .MXX lost 0.5% with restaurant chain operator Alsea ALSEA.MX sliding 5% after the company reported weak quarterly results.
Key Latin American stock indexes and currencies:
Latin American market prices from Reuters | ||
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1142.57 | 0.03 |
MSCI LatAm .MILA00000PUS | 2162.74 | -0.35 |
Brazil Bovespa .BVSP | 129088.25 | -0.66 |
Mexico IPC .MXX | 52097.58 | -0.52 |
Chile IPSA .SPIPSA | 6686.98 | 0.18 |
Argentina Merval .MERV | 1774852.69 | -1.808 |
Colombia COLCAP .COLCAP | 1321.55 | -1.69 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.6947 | -0.09 |
Mexico peso MXN= | 19.8348 | 0.57 |
Chile peso CLP= | 945.2 | 0.16 |
Colombia peso COP= | 4325.34 | -1.47 |
Peru sol PEN= | 3.753 | -0.08 |
Argentina peso (interbank) ARS=RASL | 984.5 | -0.05 |
Argentina peso (parallel) ARSB= | 1210 | 2.89 |
Reporting by Shashwat Chauhan, Pranav Kashyap and Johann M Cherian in Bengaluru; Editing by Andrew Cawthorne and Alistair Bell
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