Mexican peso leads Latam FX higher; Brazil stocks rise
Mexican president-elect names cabinet members
Brazil central bank holds interest rate steady
Updated at 03:25 p.m. ET/ 1925 GMT
By Shristi Achar A
June 20 (Reuters) - A gauge of Latin American currencies rose on Thursday, led by the Mexican peso as President-elect Claudia Sheinbaum named the first members of her incoming cabinet, while Brazilian stocks outperformed in the region.
The MSCI index for Latin America currencies .MILA00000CUS gained 0.2%, with Mexico's peso MXN= up 0.4% after Sheinbaum named six members of her incoming cabinet , including political heavyweight Marcelo Ebrard as economy minister.
Helping the currency further, domestic retail sales rose 0.5% in April, compared with expectations of a 0.3% fall, as per LSEG data.
"The evidence that merits having faith in the country and its currency regardless of the political anxiety came in the form of retail sales," said Juan Perez, director of trading at Monex USA.
"Overall, Mexico is not falling through the cracks, and speculation over major reforms to play a negative role in the country’s progress is a bit overplayed ... Ebrard is primarily respected for re-negotiating NAFTA successfully."
Mexican stocks .MXX remained under pressure, down 0.3%.
The Peruvian sol PEN=PE traded 0.4% higher, tracking higher copper prices.MET/L
Brazil's real BRBY gave up early gains to inch nearly 0.3% lower, extending losses for a fifth consecutive session.
The Brazilian central bank'srate-setting committee, known as Copom, held the Selic benchmark interest rate at 10.50% on Wednesday, raised its inflation projections and introduced an alternative scenario with steady rates next year.
"Looking forward, Copom's updated inflation forecasts put our more hawkish monetary policy call of a Selic rate stable at 10.50% until end-2025 in an even more comfortable position (consensus at 9.50%)," Citi economist Leonardo Porto noted.
The committee's united front was a sharp contrast with May's split decision, when directors tapped by the current government dissented from slowing the pace of rate cuts, rattling markets with questions about the monetary policy outlook.
Brazil's main Bovespa stock index .BVSP, however, rose 0.4% to touch a one-week high, with state-owned oil company Petrobras PETR4.SA up 1.7% as crude prices climbed. O/R
Markets in Argentina and Chile were closed for public holidays.
Key Latin American stock indexes and currencies:
Latest | Daily % change | |
MSCI Emerging Markets .MSCIEF | 1094.33 | -0.09 |
MSCI LatAm .MILA00000PUS | 2177.76 | 0.27 |
Brazil Bovespa .BVSP | 120729.03 | 0.39 |
Mexico IPC .MXX | 53160.87 | -0.3 |
Chile IPSA .SPIPSA | - | - |
Argentina MerVal .MERV | - | - |
Colombia COLCAP .COLCAP | 1375.54 | -0.36 |
Currencies | Latest | Daily % change |
Brazil real BRBY | 5.4551 | -0.27 |
Mexico peso MXN=D2 | 18.3320 | 0.41 |
Chile peso CLP=CL | - | - |
Colombia peso COP= | 4165.37 | -0.09 |
Peru sol PEN=PE | 3.792 | 0.41 |
Argentina peso (interbank) ARS=RASL | - | - |
Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru
Editing by Alistair Bell and Marguerita Choy
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