Russian rouble hits three-month low; Latam FX rises
Russia’s rouble touched its weakest in more than three
months on Monday on heightening geopolitical risks, while
several Latin American currencies rose, led by the Brazilian
The rouble slid past 63 per dollar in Moscow
trading before recovering, as Russia fired missiles on busy
Ukrainian cities, killing civilians and knocking out power and
The escalation in geopolitical tensions comes at a time when
risk sentiment has already been dampened by data last week
showing strong U.S. job growth, bolstering the case for another
large interest rate hike by the Federal Reserve next month.
“There are definitely risks of macroeconomic and
geopolitical nature, so the market for the time being will
remain very much tilted towards a more defensive position,,”
said Cristian Maggio, head of portfolio strategy at TD
However, Latin America is viewed as a standout among
emerging markets given an early start to policy tightening
compared with other regions, Maggio said.
Russian stocks sank as much as 8.7% before cutting
a chunk of those losses. Gazprom plunged 16% as it
started trading ex-dividend.
Elsewhere, Hungary’s forint touched a record low
against the euro.
In Latin America, Mexico’s peso rose 0.2%.
The head of the country’s tax authority, Raquel Buenrostro,
was named Mexico’s new economy minister on Friday, to lead
efforts to fix a major trade dispute with the United States.
Mexican President Andres Manuel Lopez Obrador touted
Buenrostro’s experience in the public sector and master’s degree
“While it is still too early to tell what Buenrostro’s
approach will be, we think her recurrent confrontations with
large firms in the last few years… heighten some commentators’
concerns regarding her negotiation skills,” said strategists at
Brazil’s real rose 0.4% after logging its best week
since late July on Friday when investors cheered a strong
showing for far-right President Jair Bolsonaro in first round
presidential elections held on Oct. 2.
Leftist Brazilian presidential candidate Luiz Inacio Lula da
Silva has a five percentage point lead over Bolsonaro ahead of
an Oct. 30 runoff vote, according to a poll.
Lula will not maintain Brazil’s spending cap, and is looking
at two main ideas including a flexible primary surplus target,
two senior aides told Reuters.
Meanwhile, Argentina will regulate import authorizations
more closely in an effort to prevent fraud and preserve reserves
of U.S. dollars, Economy Ministry sources said on Saturday.
Key Latin American stock indexes and currencies:
Stock indexes Latest Daily % change
MSCI Emerging Markets 883.23 -1.62
MSCI LatAm 2197.79 -0.4
Brazil Bovespa 115556.91 -0.7
Mexico IPC 45561.23 -0.37
Chile IPSA 5079.68 -2
Argentina MerVal 144645.33 -1.416
Colombia COLCAP 1197.62 -0.95
Currencies Latest Daily % change
Brazil real 5.1893 0.43
Mexico peso 19.9643 0.28
Chile peso 936.9 0.00
Colombia peso 4600.15 0.30
Peru sol 3.9602 -0.38
Argentina peso 149.1700 -0.18
Argentina peso 273 3.30
(Reporting by Susan Mathew and Amruta Khandekar in Bengaluru;
Editing by Kirsten Donovan and Alistair Bell)
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