Most Latam currencies down as dollar firms on hope of smaller Fed cuts
Updated at 10:35 a.m. ET/ 1435 GMT
Brazil's real down despite central bank intervention
Mexico's peso set for near 6% monthly drop
Latam stocks flat, FX adds 0.2%
By Shashwat Chauhan
Aug 30 (Reuters) -Most Latin American currencies slipped on Friday, as the dollar firmed after data supported the likelihood of smaller interest rate cuts by the Federal Reserve, while the Mexican peso was an outlier.
The dollar index =USD perked up after data showed U.S. consumer spending rose in July, suggesting the economy strengthened early in the third quarter, lowering the chance of 50 basis point interest rate cut from the Fed next month.
The personal consumption expenditures (PCE) price index - the Fed's preferred inflation gauge - rose 0.2% last month after an unrevised 0.1% gain in June, the report also showed.
"This data keeps the Fed on path to a 25-basis point cut in September followed by additional 25 basis point cuts in November and December," said Greg Wilensky, head of U.S. fixed income at Janus Henderson Investors.
"However, a faster cutting path is certainly possible, including the chance of an initial 50 bps cut if next Friday's employment data comes in materially weaker than expected."
Brazil's real BRL= slipped 0.3%, on track for its eight straight monthly loss despite the country's central bank selling the entire $1.5 billion offered in a spot auction announced on Thursday.
Separately, central bank data showed Brazil's public sector overall deficit exceeded 10% of gross domestic product (GDP) in the 12 months through July, highlighting the fiscal challenges facing Latin America's largest economy.
Chile's peso CLP= dipped 0.2%, while Colombia's peso COP= eased 1%.
Mexico's peso MXN= bucked the trend to rise 0.7%, though it was set for a close to 6% monthly drop as worries about domestic judicial reforms and expectation of dovish central bank policy saw investors grow less positive on the currency.
Amongst equities, Brazil's Bovespa .BVSP dipped 0.4%, while the Mexican bourse .MXX slipped 0.3%.
MSCI's index for Latin American currencies .MILA00000CUS gained 0.2%, on track for marginal monthly losses, while a gauge for stocks .MILA00000PUS was flat, set for monthly advances.
Global equities saw sharp declines earlier this month as investors dumped risk assets after a July jobs report in the United States fanned worries of a recession in the world's biggest economy. The worries have faded as data throughout the month showed the resilience of U.S. consumers.
Adding to the volatility, a surprise rate-hike by the Bank of Japan earlier this month caused the yen JPY= to rise and a sharp unwinding of currency carry trades, where investors borrow in low-yielding currencies such as the yen to invest in high yielding assets like stocks.
High-yielding Latin American currencies saw sharp declines, but most have recovered as markets gear up for the Fed's expected interest rate cut next month, following Chair Jerome Powell's dovish tilt last week.
Markets in Peru were shut for a public holiday.
HIGHLIGHTS
** Brazil's jobless rate drops to 6.8% in quarter through July
** Chile's copper output, manufacturing production up in July
** Kenya's inflation rises slightly to 4.4% yr/yr in August
** Maldives bonds at record low after Fitch downgrade amid default concerns
Key Latin American stock indexes and currencies:
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1099.9 | 0.45 |
MSCI LatAm .MILA00000PUS | 2236.96 | 0.00 |
Brazil Bovespa .BVSP | 135449.54 | -0.44 |
Mexico IPC .MXX | 52969.78 | -0.32 |
Chile IPSA .SPIPSA | 6480.29 | 0.5 |
Argentina Merval .MERV | 1737835.65 | 4.68 |
Colombia COLCAP .COLCAP | 1337.51 | 0.16 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.6438 | -0.31 |
Mexico peso MXN= | 19.699 | 0.69 |
Chile peso CLP= | 914.02 | -0.19 |
Colombia peso COP= | 4152.43 | -0.99 |
Peru sol PEN= | 3.7485 | -0.22 |
Argentina peso (interbank) ARS=RASL | 950 | 0.052631579 |
Argentina peso (parallel) ARSB= | 1290 | 1.937984496 |
Major EM currencies this month https://tmsnrt.rs/4dI4FAa
Reporting by Shashwat Chauhan in Bengaluru; editing by Barbara Lewis
Ativos relacionados
Últimas notícias
Isenção de Responsabilidade: As entidades do XM Group proporcionam serviço de apenas-execução e acesso à nossa plataforma online de negociação, permitindo a visualização e/ou uso do conteúdo disponível no website ou através deste, o que não se destina a alterar ou a expandir o supracitado. Tal acesso e uso estão sempre sujeitos a: (i) Termos e Condições; (ii) Avisos de Risco; e (iii) Termos de Responsabilidade. Este, é desta forma, fornecido como informação generalizada. Particularmente, por favor esteja ciente que os conteúdos da nossa plataforma online de negociação não constituem solicitação ou oferta para iniciar qualquer transação nos mercados financeiros. Negociar em qualquer mercado financeiro envolve um nível de risco significativo de perda do capital.
Todo o material publicado na nossa plataforma de negociação online tem apenas objetivos educacionais/informativos e não contém — e não deve ser considerado conter — conselhos e recomendações financeiras, de negociação ou fiscalidade de investimentos, registo de preços de negociação, oferta e solicitação de transação em qualquer instrumento financeiro ou promoção financeira não solicitada direcionadas a si.
Qual conteúdo obtido por uma terceira parte, assim como o conteúdo preparado pela XM, tais como, opiniões, pesquisa, análises, preços, outra informação ou links para websites de terceiras partes contidos neste website são prestados "no estado em que se encontram", como um comentário de mercado generalizado e não constitui conselho de investimento. Na medida em que qualquer conteúdo é construído como pesquisa de investimento, deve considerar e aceitar que este não tem como objetivo e nem foi preparado de acordo com os requisitos legais concebidos para promover a independência da pesquisa de investimento, desta forma, deve ser considerado material de marketing sob as leis e regulações relevantes. Por favor, certifique-se que leu e compreendeu a nossa Notificação sobre Pesquisa de Investimento não-independente e o Aviso de Risco, relativos à informação supracitada, os quais podem ser acedidos aqui.