Latam FX set for weekly losses on commodity weakness
Updated at 1451 GMT
Brazil c.bank to stand pat for second time on July 31, poll says
Usiminas plunges on 'weak' Q2 results, outlook
Brazil's Vale says Q2 net profit triples
Chile c.bank to keep interest rate at 5.75% in July, poll says
Stocks flat, FX down 0.2%
By Johann M Cherian
July 26 (Reuters) -An index tracking Latin American currencies edged lower on Friday, and was poised to end the week in losses, tracking weaker commodity prices while investors also assessed corporate earnings reports out of Brazil.
MSCI's index tracking currencies in the resource-rich region .MILA00000CUS slipped 0.2% against the dollar, and was poised for a weekly drop of 1.8%, its steepest drop in six weeks.
Iron ore producer Brazil's real BRL= dipped 0.1%, but was set to end the week lower by nearly 1%, tracking a weekly decline in prices of the base metal. IRN/
A Reuters poll showed economists expect the local central bank to stay pat on interest rates for a second time in a row next week as a wave of currency instability deepens policymaker concerns over the trajectory of consumer prices.
Currencies of oil exporter Mexico MXN= slipped 0.2% as crude prices dropped more than $1 and were headed for a third consecutive week of declines. O/R
The world's largest copper producer Chile's peso CLP= dipped 0.2% as prices of the red metal were set to end its third week in losses. The central bank is expected to hold its benchmark interest rate at 5.75% at its monetary policy meeting next week, a poll showed. MET/L
Bucking the trend, Colombia's peso COP= firmed 0.6%, while Peru's sol PEN= also strengthened 0.6%.
On the equities front, Brazil's Bovespa .BVSP added 0.4%, with Vale VALE3.SA rising 1.3%, on track to notch its biggest one-day gain in over a month after the mining giant said its second-quarter net profit was triple the year-earlier period, beating analyst estimates as sales jumped.
Still, analysts at Jefferies said in a note: "The days of Vale as a double-digit capital returns yield story may be over for now, but we expect cash flow and capital returns to significantly improve in 2025 due to higher iron ore, copper and nickel volumes, and higher copper and nickel prices."
Usiminas USIM5.SA tanked 16% after the steelmaker reported a loss in the second quarter and was operationally weaker than expected, in a period in which the national steel sector was impacted by strong imports and pressure on steel prices.
A broader index tracking regional bourses .MILA00000PUS was subdued, set for its biggest weekly decline of 3.1% since early June.
Indexes in Mexico .MXX and Colombia .COLCAP edged lower by 0.1% each, while Argentine stocks .MERV rose 1.4%.
During the weekend, attention will also be on oil producer Venezuela's presidential elections.
Key Latin American stock indexes and currencies:
Latin American market prices from Reuters | ||
Stock indexes | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1072.14 | -0.17 |
MSCI LatAm .MILA00000PUS | 2185.61 | -0.11 |
Brazil Bovespa .BVSP | 126577.58 | 0.5 |
Mexico IPC .MXX | 52759.77 | -0.33 |
Chile IPSA .SPIPSA | 6460.72 | 0.31 |
Argentina MerVal .MERV | 1560440.81 | 1.441 |
Colombia COLCAP .COLCAP | 1351.91 | -0.13 |
Currencies | Latest | Daily % change |
Brazil real BRBY | 5.6534 | -0.11 |
Mexico peso MXN=D2 | 18.4580 | -0.06 |
Chile peso CLP=CL | 950.6 | -0.14 |
Colombia peso COP= | 4014.05 | 0.60 |
Peru sol PEN=PE | 3.7395 | 0.12 |
Argentina peso (interbank) ARS=RASL | 929.0000 | 0.11 |
Argentina peso (parallel) ARSB= | 1425 | 1.40 |
Reporting by Johann M Cherian in Bengaluru; Editing by Emelia Sithole-Matarise
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