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Mexican peso breaks key 18 peso to dollar barrier
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Colombia CPI data due on Saturday
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Brazil's producer prices rise in Jan
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Latam FX rises 0.4%, stocks up 1.4%
(Adds details, updates prices, adds chart)
By Amruta Khandekar and Bansari Mayur Kamdar
March 3 (Reuters) - Latin American currencies rose on
Friday, with Mexico's peso nearing a five-year high supported by
a widening rate differential between Banxico and the U.S.
Federal Reserve, robust inflows of remittances and the country's
fiscal position.
The peso slipped past 18.00 per dollar, appreciating
to 17.98, a level it had not reached since April 2018.
"In Mexico, which has been perceived as the region's
darling, what we are seeing right now is robust macro
fundamentals, narrow deficit and low debt, high carry and on top
of that this really positive narrative regarding nearshoring,"
said Joel Virgen Rojano, senior Latam strategist at TD
Securities.
The peso was headed for a weekly advance of over 2% as the
dollar softened and the gap between interest rates in Mexico and
the United States widened, as the Bank of Mexico enacted a
bigger-than-expected 50 basis points rate hike last month.
The Colombian peso rose 0.6%, extending gains for the third-straight session, with investors awaiting key consumer prices data on Saturday. The currency of top copper exporter Chile rose 1.1% as the red metal's prices firmed on China recovery hopes. The Brazilian real inched up 0.1%, after the previous session's sharp declines on worries around a slowdown in Latin America's largest economy. Data on Friday showed the country's producer price index rose 0.29 percent in January from the previous month. Economists at Scotiabank said they are also awaiting an announcement from Brazil's Finance Minister Fernando Haddad on his proposal for a new fiscal framework. The government believes it will get a tax reform approved by Congress by the end of this year, the finance ministry official overseeing such efforts said. Regional currencies rose 0.4% and were set for weekly gains of around 1.1%. Broader emerging market currencies and stocks rose 0.4% and 1.0% on upbeat economic data from China and overnight comments from a Federal Reserve official backing a measured pace of rate hikes. MSCI's index for Latin American stocks gained 1.4% by 1830 GMT and was set for marginal weekly gains. Equities in Mexico rose nearly 1.8%, while Brazil's Bovespa index gained 0.8% boosted by materials stocks. Investors shed $1.8 billion in emerging market debt and bought $2.4 billion in emerging market equities in the week to Wednesday, a report from BofA Global Research showed on Friday.
Elsewhere in emerging markets, Turkey's right-wing IYI Party
withdrew from the main opposition alliance, potentially
weakening the challenge to President Tayyip Erdogan.
Key Latin American stock indexes and currencies at 1830 GMT:
Stock indexes Latest Daily % change MSCI Emerging Markets 989.57 0.97 MSCI LatAm 2220.18 1.34 Brazil Bovespa 104006.72 0.66 Mexico IPC 54264.07 1.75 Chile IPSA 5460.64 0.99 Argentina MerVal 245972.36 1.328 Colombia COLCAP 1214.52 2.14
Currencies Latest Daily % change
Brazil real 5.1988 0.08
Mexico peso 17.9775 0.76
Chile peso 803.6 0.97
Colombia peso 4783 0.60
Peru sol 3.7802 -0.20
Argentina peso (interbank) 198.2700 -0.20 Argentina peso (parallel) 371 1.62
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Mexico's peso rallies in 2023, breaks key 18 peso to dollar
barrier. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Amruta Khandekar and Bansari Mayur Kamdar;
Editing by Elaine Hardcastle and Sharon Singleton)
