Latam currencies, stocks slump as investors reassess Fed prospects
Peru’s central bank cuts benchmark interest rate to 6%
Colombia inflation to fall at slower rate in coming months: policymaker
Brazil’s services activity unexpectedly down in February
Argentina’s monthly inflation below forecast
Latam stocks down 1.7%, FX down 0.8%
Updated at 3:45 p.m. EDT/1945 GMT
By Bansari Mayur Kamdar
April 12 (Reuters) –Currencies and stock indexes in Latin America broadly fell on Friday, pressured by a rising dollar as investors continued to reprice expectations for U.S. monetary policy.
The MSCI index for Latin American currencies .MILA00000CUS fell 0.8% and was set to end the week 1% lower. A basket of regional stocks .MILA00000PUS fell 1.7% on the day and lost 2.2% for the week.
Both indexes were set for their worst week since mid-January as the U.S. dollar has soared this week, denting investor appetite for riskier emerging market assets.
The dollar index =USD jumped 1.7% this week after stronger than expected U.S. consumer prices data on Wednesday and commentary from Fed officials saying there is no rush to cut interest rates.
“This is partly just a reflection of the fact that Latin American central banks have had a bit more space to ease and some of this modest weakness we’ve seen this week is a bit of a reversal of the incredible strength,” said Rachel Ziemba, founder at Ziemba Insights.
Leading regional losses, Mexico’s peso MXN= dropped 1.3% against the dollar, the Colombian peso COP= fell 0.9% and Chile’s peso CLP=CL was down 1.2%.
“We’re entering into this important period for the (Mexican) peso with the election campaign and with the dynamics with the central bank,” Ziemba said.
Peru’s sol PEN= slipped 0.4% after its central bank cut the benchmark interest rate to 6.00% on Thursday, marking a return to monetary easing in Peru.
Data showed inflation in Argentina slowed to 11% on a monthly basis in March, below forecast, a day after the central bank cut its benchmark interest rate by 10 points to 70%.
The South American nation is battling inflation that is amongthe worst in the world, with rolling 12-month inflation at 287.9% in March. Argentina’s peso was trading at 985 to the dollar on the informal parallel market. ARSB=
Brazil’s real BRL= shed 0.6% against the greenback. Data showed activity in Brazil’s services sector fell 0.9% in February from the previous month, missinganalyst forecasts.
El Salvador priced a six-year, $1 billion note yielding 12% to be issued next week, underwritten by Bank of America Securities, LSEG data showed.
The broader emerging market currencies index .MIEM00000CUS fell 0.4% to its lowest level since January, while stocks .MSCIEF shed 1.3%.
HIGHLIGHTS:
** Argentina’s government (and a bot) say inflation is easing. Shoppers aren’t so sure
** El Salvador more likely to get new IMF deal than multiple rating upgrades – Moody’s
** Peru’s central bank: new pension withdrawal unlikely to fan inflation
Key Latin American stock indexes and currencies at 1945 GMT:
|
Latest |
Daily % change |
|
|
MSCI Emerging Markets .MSCIEF |
1041.29 |
-1.31 |
|
MSCI LatAm .MILA00000PUS |
2475.92 |
-1.69 |
|
Brazil Bovespa .BVSP |
125811.05 |
-1.24 |
|
Mexico IPC .MXX |
56583.47 |
-0.43 |
|
Chile IPSA .SPIPSA |
6549.72 |
-2.63 |
|
Argentina MerVal .MERV |
1243391.71 |
-1.264 |
|
Colombia COLCAP .COLCAP |
1398.54 |
-1.18 |
|
Currencies |
Latest |
Daily % change |
|
Brazil real BRBY |
5.1188 |
-0.57 |
|
Mexico peso MXN=D2 |
16.6452 |
-1.27 |
|
Chile peso CLP=CL |
966.3 |
-1.20 |
|
Colombia peso COP= |
3854.54 |
-0.86 |
|
Peru sol PEN=PE |
3.6929 |
-0.40 |
|
Argentina peso (interbank) ARS=RASL |
866.5000 |
-0.06 |
|
Argentina peso (parallel) ARSB= |
985 |
1.52 |
Reporting by Bansari Mayur Kamdar and Lisa Mattakcla in Bengaluru, Editing by Josie Kao
