December 23, 2019 / 8:24 PM / a month ago

EMERGING MARKETS-Latam FX rise before holidays; Argentina's black market peso plumbs lows

    * Brazil's real firms for first time in three sessions
    * Mexican peso lags after inflation data
    * Argentina's black market peso hit all-time lows

 (Updates price action)
    By Medha Singh
    Dec 23 (Reuters) - Most Latin American currencies
strengthened on Monday in a holiday-shortened week as investors
continued buying risky assets on improving sentiment surrounding
U.S.-China trade relations and global growth.
    Bucking the trend, Argentina's black market peso weakened
4.56% to an all-time low of 76.75 to the U.S. dollar, traders
said, as the market digested new government data showing
economic activity contracted 0.9% in October versus the same
month last year.
    The official peso, supported by capital controls
meant to halt a run on the currency, slipped only 0.29% on
Monday to 59.99 to the greenback. 
    The MSCI's index of Latin American currencies
 edged higher, building on a rally that has put
the index on pace for its best monthly percentage gain this year
as Sino-U.S. trade ructions cooled.
    China would lower tariffs on a range of products from
January 1, its finance ministry said on Monday, as Beijing looks
to boost imports amid a slowing economy.
    Brazil's real gained 0.5% against a steady dollar
while currencies of commodity-linked economies - Chilean peso
 and Colombian peso - tracked higher copper and oil
prices respectively.
    Given the light economic calendar before the holidays,
analysts expected a dull trading environment. Investors in
Brazil and Argentina will break for a two-day Christmas holiday
on Tuesday while markets in Mexico will shut early on Tuesday.
    The Mexican peso lagged most of its peers as data
showed consumer prices in the first half of December slipped
well below the central bank's 3% target, raising chances of
further monetary easing.
    The tame inflation comes on the heels of the central bank's
move to cut its benchmark interest rate for the fourth straight
time. 
    "Soft inflation will allow Mexico's central bank to continue
its easing cycle. We expect a further 50 bps of rate cuts over
the coming months," said Nikhil Sanghani, an economist at
Capital Economics.
        
    Key Latin American stock indexes and currencies at 1952 GMT:
 Stock indexes                                   daily % change
                                      Latest   
 MSCI Emerging Markets                1110.28              0.24
 MSCI LatAm                           2897.98             -0.08
 Brazil Bovespa                     115205.20              0.07
 Mexico IPC                          44232.22             -0.61
 Chile IPSA                           4726.10             -0.21
 Argentina MerVal                    39671.06             2.689
 Colombia IGBC                        1653.64              0.66
                                                               
 Currencies                                      daily % change
                                               
                                       Latest  
 Brazil real                           4.0798              0.35
 Mexico peso                          18.9450             -0.03
 Chile peso                             754.3             -0.12
 Colombia peso                           3310              0.57
 Peru sol                               3.318             -0.12
 Argentina peso (interbank)           59.9850             -0.28
                                               
 

 (Reporting by Medha Singh in Bengaluru; Editing by Lisa
Shumaker)
  
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