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Dollar index slips after U.S. inflation report
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Brazil's Neto against experiment on monetary policy
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Chile c.bank to hold rates in April, kick off easing in
May
-poll
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Latam FX up 0.2%, stocks up 0.5%
By Shubham Batra and Bansari Mayur Kamdar Feb 14 (Reuters) - Chile's peso led gains among Latin American currencies on Tuesday against a muted dollar, while investors assessed mixed U.S. inflation data for January.
The dollar index slipped 0.1% following data showed U.S. consumer prices increased from the prior month in January, while the underlying trend showed inflation is slowing, likely keeping the Federal Reserve on a modest path of interest rate hikes. The MSCI's index for Latin American currencies inched up 0.2% by 1452 p.m. GMT. "The Fed will read this inflation report as supporting their view that further rate increases (plural) are appropriate in 2023," said Bill Adams, chief economist for Comerica Bank. "But they also acknowledge much more uncertainty about the appropriate course for monetary policy than in 2022, when the gap between short-term interest rates and inflation was much larger." Currency of top copper producer Chile gained 1.0%, supported by firm copper prices, while the Peruvian sol was flat against the greenback. A central bank poll of traders showed Chile's central bank is expected to maintain the country's benchmark interest rate at 11.25% at its next monetary policy meeting in April.
Colombia's peso gained 0.3% against the dollar, with investors closely monitoring retail sales data due later in the day.
The Brazilian real was flat amid ongoing speculation about increasing inflation targets following appeals from President Luiz Inacio Lula da Silva. Central bank governor Roberto Campos Neto said the country is not at a moment when "it would be good to experiment" on monetary policy.
Oil exporter Mexico's peso was subdued as crude prices fell after the U.S. government said it would release more crude from its Strategic Petroleum Reserve. Stocks in Latin America rose 0.5%. Brazil's Bovespa index slipped 0.1%.
Banco do Brasil SA rose 4.2% after the
state-controlled lender said it expects further profit growth
this year after posting a better-than-expected 52.4% surge in
fourth quarter profits largely due to higher earnings on loans.
Elsewhere in emerging markets, the Kenyan shilling hit a fresh low as dollar demand from the oil sector
outpaced thin foreign-currency supply.
Global ratings agency Fitch cut Pakistan’s sovereign credit
rating by two notches from CCC+ to CCC-, citing policy and large
refinancing risks, critically low reserves and difficult
conditions set by the International Monetary Fund.
Key Latin American stock indexes and currencies at 1452 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 1015.49 0.19 MSCI LatAm 2256.02 0.52
Brazil Bovespa 108846.22 0.01
Mexico IPC 53137.11 0.16
Chile IPSA 5369.90 0.07
Argentina MerVal 258653.14 0.399
Colombia COLCAP 1231.89 -0.67 Currencies Latest Daily %
change
Brazil real 5.1628 0.22
Mexico peso 18.5569 -0.02
Chile peso 788 0.88
Colombia peso 4776.5 0.23
Peru sol 3.8575 -0.34
Argentina peso (interbank) 192.0100 -0.19 Argentina peso (parallel) 377 0.53 (Reporting by Bansari Mayur Kamdar and Shubham Batra in
Bengaluru; Editing by Andrea Ricci)
