Dollar strength weighs on Latam FX; copper prices lift currencies of Peru, Chile
'Amazonia' bonds in 2024 seen a tough sell for some
US is reimposing oil sanctions on Venezuela, officials say
Mexican economy up 2.1% y/y in March - preliminary estimate
Latam FX down 0.2%, stocks flat
Updated at 3:30pm ET/1930 GMT
By Bansari Mayur Kamdar and Lisa Pauline Mattackal
April 18 (Reuters) -A firm dollar continued to pressuremost Latin American currencies on Thursday as Federal Reserve officials emphasized few interest rate cuts are on the table this year, although strong copper prices helped Chile's peso and Peru's sol tobuck regional weakness.
MSCI's index trackingLatam currencies .MILA00000CUS slipped about 0.2% while a basket of regional stocks .MILA00000PUS was flat on the day.
The currenciesof leading copper producers ChileCLP= and Peru PEN=PE were bright spots among Latin American currencies, respectively rising 1.3% and 0.6% againstthe dollar as copper prices rallied to a 22-month high.
"We think the headwinds driving the depreciation of the Chilean peso against the U.S. dollar have largely run their course," said Ruben Gargallo Abargues, assistant economist at Capital Economics, in a note.
Emerging market currencies have wobbled this week as thedollar rose to nearly five-month highs and Treasury yields climbed, as investorsweighed strong U.S. labor market data and Fed officials' comments that the decline in inflation may have stalled.
Higher U.S. rates typically reduce the appeal forriskier but higher-yielding emerging market assets.
"(Forex) is going through a repricing ... with especially emerging market currencies seeing big downward adjustments in values versus the USD as they respond to higher U.S. yields, and risk-off sentiment globally," said Thierry Wizman, global FX & rates strategist at Macquarie.
Brazil's finance minister and central bank head said on Thursday that G20 economies were adjusting to changing Fed rate cut expectations and the subsequent repricing of emerging market currencies and debt.
Continuedtensions between Israel and Iran also kept investors hesitant on risk assets.
Colombia's peso dipped 1% <COP=> and Mexico's peso <MXN=> weakened past 17 per dollar ascrude prices fell on hopes of easing tensions in major producing region the Middle East.
Mexico's economy likely grew 2.1% in March fromthe same month a year earlier, a preliminary estimate from national statistics agency INEGI showed.
Elsewhere, the Biden administration said it would not renew a licence that had broadly eased Venezuela oil sanctions.
A political push to raise the first-ever "Amazonia Bond" has intensified during talks to agree on a roadmap, yet the chance of a deal this year faces technical hurdles and scepticism among some of those tasked with managing the debt, sources told Reuters.
HIGHLIGHTS
** Turkish economy on right track , monetary policy fully functional: Finance Minister Simsek
** IMF tells Asian central banks not to follow Fed too closely
**Petrobras CEO says dividends not on agenda of next board meeting
Key Latin American stock indexes and currencies at 1930 GMT:
Latest | Daily % change | |
MSCI Emerging Markets .MSCIEF | 1017.06 | 0.45 |
MSCI LatAm .MILA00000PUS | 2386.88 | -0.02 |
Brazil Bovespa .BVSP | 123972.04 | -0.16 |
Mexico IPC .MXX | 55695.81 | 0.51 |
Chile IPSA .SPIPSA | 6458.75 | 0.03 |
Argentina MerVal .MERV | 1171155.88 | -0.102 |
Colombia COLCAP .COLCAP | 1328.81 | -1.58 |
Currencies | Latest | Daily % change |
Brazil real BRBY | 5.2455 | -0.07 |
Mexico peso MXN=D2 | 17.0531 | -0.56 |
Chile peso CLP=CL | 964.9 | 1.31 |
Colombia peso COP= | 3931 | -0.98 |
Peru sol PEN=PE | 3.7167 | 0.59 |
Argentina peso (interbank) ARS=RASL | 869.5000 | 0.00 |
Argentina peso (parallel) ARSB= | 1005 | 2.49 |
Reporting by Bansari Mayur Kamdar in Bengaluru; editing by Barbara Lewis and Richard Chang
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.