Peru’s sol lifts Latam currencies as investors await U.S. inflation data
Latin American currencies edged
higher on Wednesday as investors looked ahead to the release
this week of U.S. inflation data, while Peru’s sol led the
broader index higher after the government won a confidence vote
amid fierce protests.
The MSCI’s index for Latam currencies gained
0.5% in early trading and regional stocks jumped
1.1%, outperforming emerging market peers.
All eyes were on the release of U.S. Consumer Price Index
data on Thursday which could sway the Federal Reserve’s monetary
policy tightening plans.
The Peruvian sol jumped 0.9%, hitting its highest level in
more than six months against the greenback.
Peru’s Congress approved a confidence vote in the government
on Tuesday, supporting the new prime minister and Cabinet amid a
political crisis following anti-government protests that have
left 40 people dead and hundreds injured.
“The confirmation gives newly minted President (Dina)
Boluarte breathing room and allows her to focus on pressing
issues such as the second early election vote, which is top
order of business after the first vote took place in December,”
Citi strategists wrote in a client note.
The office of the Andean nation’s top prosecutor said it has
launched an inquiry into Boluarte and members of her Cabinet
over the violent protests.
“Protests are likely to continue in the short term and add
pressure to President Boluarte, who is now facing scrutiny from
the attorney general’s office about the way she has responded to
the protests,” Citi added.
Colombia’s peso rose 0.5% as a jump in crude prices
supported the currency of the oil producer.
Mexico’s peso was flat against the greenback.
Data showed Mexican industrial output was unchanged in
November from October but rose 3.2% on a year-over-year basis.
Economists, however, expect the sector to be hurt by an economic
slowdown in the United States.
The Brazilian real was largely flat against
the dollar after a volatile start this week. Supporters of
far-right former President Jair Bolsonaro stormed the seats of
power in Brasilia on Sunday, ransacking the Supreme Court,
Congress and presidential offices.
Data showing Brazil’s retail sales volumes posted their
biggest drop in five months in November, affected by higher fuel
prices and a weak Black Friday performance, also weighed on the
Elsewhere in emerging markets, Egypt’s pound rebounded after
briefly hitting a new low below 32 to the dollar as the Egyptian
central bank moved to a more flexible exchange rate under the
terms of an International Monetary Fund financial support
Key Latin American stock indexes and currencies at 1447 GMT:
Stock indexes Latest Daily %
MSCI Emerging Markets 1015.92 0.19
MSCI LatAm 2244.38 1.09
Brazil Bovespa 111080.82 0.24
Mexico IPC 52461.07 0.22
Chile IPSA 5176.48 0.62
Argentina MerVal 218484.55 1.239
Colombia COLCAP 1341.28 0.49
Currencies Latest Daily %
Brazil real 5.1958 0.10
Mexico peso 19.0565 -0.04
Chile peso 823.8 0.25
Colombia peso 4753.19 0.65
Peru sol 3.7698 0.35
Argentina peso (interbank) 180.6800 -0.16
Argentina peso (parallel) 356 0.28
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by
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