The peso firmed to about 786.54 against the dollar, its strongest in five weeks. The currency was last up 1.4%, gaining for the third straight day as copper prices improved on signs of easing worries about global banking crunches and hopes of improving demand from top consumer, China.
Chile's peso is headed for quarterly gains of 6.9%, among the top performing currencies across Latin America.
"With the removal of some of the uncertainties following the Silicon Valley fallout over the last couple of weeks, I think the Chilean peso of the first ones to recover, given also the recovery in copper prices," said Luis Hurtado, director of Latin American FX at CIBC Capital Markets.
Rising copper prices also helped lift the currency of the world's second largest producer, Peru's sol , about 0.7%. Prosecutors are investigating President Dina Boluarte and former President Pedro Castillo for allegedly laundering money as part of a criminal organization. "When you talk to investors, they will tell you they have come used to the political and corruption news that comes out of Peru if you take a view of what has happened in Peru over the last six years," Hurtado added. Castillo was removed from office in December after attempting to dissolve Congress before an impeachment vote, while Boluarte ascended to the presidency in the wake of his removal and arrest. Brazil's real added about 0.5%, the smallest rise among major Latam currencies that day as a highly anticipated fiscal framework was to be finalized by Wednesday.
Institutional Relations Minister Alexandre Padilha told reporters the leaders of Brazil's Congress have indicated that, once submitted, the fiscal rules should be quickly approved.
Other currencies including those of Mexico and Colombia rose 0.8% and 1.1%, respectively, taking cues from higher oil prices. Colombia's central bank is seen raising the interest rate by 25 basis points to 13% at its meeting on Thursday. Stocks across Latin America also rose, with the MSCI's index up 1.3% tracking a broader theme of no further cracks emerging in global banking in recent sessions and optimism sparked in early Asia hours by Alibaba's revamp plan boosting hopes that clampdowns on China's tech sector may be ending.
Key Latin American stock indexes and currencies at 1536 GMT:
Stock indexes Latest Daily
%
change
MSCI Emerging Markets 979.84 0.94
MSCI LatAm 2170.06 1.37
Brazil Bovespa 101678.9 0.49
5
Mexico IPC 53429.20 0.41
Chile IPSA 5296.01 0.98
Argentina MerVal 248858.6 2.67
1
Colombia COLCAP 1125.78 0.75
Currencies Latest Daily
%
change
Brazil real 5.1346 0.59
Mexico peso 18.0886 0.75
Chile peso 790.8 0.71
Colombia peso 4606.62 1.50
Peru sol 3.7532 -0.03
Argentina peso (interbank) 208.2500 -0.20
Argentina peso (parallel) 391 1.53
(Reporting by Shreyashi Sanyal & Shashwat Chauhan in Bengaluru;
Editing by Richard Chang)
