May 19, 2020 / 2:37 PM / 18 days ago

EMERGING MARKETS-Mexican peso jumps 1% as economy reopens; Latam stocks falter

    By Susan Mathew
    May 19 (Reuters) - Mexico's peso firmed 1% on Monday as it
reopened its economy, and rising oil prices supported the
Colombian peso, while Latin American stocks faltered as euphoria
over a potential COVID-19 vaccine faded with earnings clouding
Wall Street's rally. 
    Amid a push from the United States, Mexico pressed ahead
with restarting operations in the automotive, mining and
construction sectors after a lockdown, despite surging number of
new cases of the novel coronavirus in the country. 
    Mexico's coronavirus death toll has crossed 5,300, with
51,633 known cases. 
    The peso rose for the fourth session in five. The
currency has recovered nearly 10% from April lows as oil prices
recover from a couple of shocks, but the peso still remains
about 19% lower for the year. 
    Although the medium- and long-term forecasts for the Mexican
economy remain under pressure, the Mexican peso could continue
to track the optimistic turn in market sentiment in the coming
sessions, analysts at Monex Europe said.
    The dollar lagged as encouraging data from an early-stage
trial by drugmaker Moderna Inc of its COVID-19 vaccine
spurred bets of a faster economic recovery. A rally in the euro
also undermined the greenback, after France and Germany proposed
a fund that would offer grants to European Union regions and
sectors hit hardest by the COVID-19 pandemic. 
    As oil prices rose, Colombia's peso touched an over
two-month high, while currencies of Chile and Brazil
 made minor moves. 
    April, May, June and July will be the worst months of the
coronavirus crisis in Brazil, and starting in August the economy
will be able to pick back up, Economic Policy Secretary Adolfo
Sachsida said on Monday.
    Credit rating agency Moody's on Monday warned of the growing
risks to its "stable" outlook on Brazil's sovereign debt rating,
noting an even deeper recession than currently forecast could
require prolonged fiscal support from the government.

    As mixed earnings from Home Depot and Walmart
led to a choppy Wall Street session, most regional stocks fell.

    Brazil's Bovespa index traded steadily. Meat
processor Marfrig topped the index after its
quarterly profit more than doubled, but declines airline stocks
and banks outweighed.
    Mexican shares fell 1.7%, down for the fifth session
in six. 
    
    Key Latin American stock indexes and currencies at 1412 GMT:
  Stock indexes           Latest   Daily %
                                   change
 MSCI Emerging Markets     927.93     1.68
                                   
 MSCI LatAm               1638.45      0.4
                                   
 Brazil Bovespa          81224.77    -0.04
                                   
 Mexico IPC              36460.59    -1.76
                                   
 Chile IPSA               3777.76     0.39
                                   
 Argentina MerVal               -        -
                                   
 Colombia COLCAP          1076.15    -0.63
                                   
                                          
      Currencies          Latest   Daily %
                                   change
 Brazil real               5.7163     0.07
                                   
 Mexico peso              23.4730     1.16
                                   
 Chile peso                 818.8     0.23
                                   
 Colombia peso            3816.53     0.90
                                   
 Peru sol                  3.4217     0.15
                                   
 Argentina peso           67.8900    -0.10
 (interbank)                       
                                   
 
 (Additional reporting by Miguel Gutierrez in Mexico City;)
  
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