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Chile's peso up ahead of central bank decision
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Brazil's real down, dragging Latam FX index
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MSCI Latam FX index set to snap 11-day winning streak
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L'Oreal buys luxury brand Aesop from Brazil's Natura & Co
By Shashwat Chauhan and Shreyashi Sanyal April 4 (Reuters) - Chile's peso was cautiously higher on Tuesday as its central bank was expected to hold interest rates steady later in the day, while Brazilian cosmetics maker Natura jumped on the sale of its luxury brand to L'Oreal. Chile's peso added 0.7% against the dollar, with analysts expecting the country's central bank to hold its key policy rate at 11.25%.
"If the central bank of Chile can say that they can hold back on hiking interest rates, that may not necessarily be a very dovish thing ... it depends on how they present it," said Juan Perez, director of trading at Monex in Washington. "So it may not be necessarily a very dovish pause, it may be a hawkish break." Oil prices extended gains after a surprise production cut by the Organization of the Petroleum Exporting Countries along with its allies (OPEC+) over the weekend, pushing up the currencies of oil exporting Latin American currencies.
The Mexican peso edged 0.1% higher after Monday's decline, while Colombia's peso gained 0.5%. Latin American currencies posted their best quarterly performance in a year on Friday, outperforming their emerging market peers , boosted by hawkish central bank policies in the region and hopes of a rebound in top commodities consumer China.
Brazil's real lagged its peers, falling 0.2% and also pushing the MSCI's index for Latin American currencies down 0.2%, marking its first drop in 12 days.
Brazil's Economic Policy Secretary Guilherme Mello said the current growth potential of the Brazilian economy is 2.5%, while highlighting that macroeconomic conditions are in place for the central bank to cut interest rates. The country's Bovespa stock index gained 1.4% as Natura & Co rose more than 5% after it agreed to sell Australian luxury brand Aesop to French cosmetics company L'Oreal for an enterprise value of $2.53 billion.
Meanwhile, Romania's central bank kept its benchmark
interest rate on hold at 7% for the second consecutive month, in
line with expectations. The leu was flat against the
euro after gaining earlier in the day.
Pakistan's central bank raised its key interest rate to a
record 21% as the cash-strapped country bid to curb crippling
food inflation and maintain the confidence of foreign creditors.
Its rupee hit an all-time low of 287 against the
dollar earlier in the day.
Key Latin American stock indexes and currencies at 1447 GMT:
Stock indexes Latest Daily
%
change
MSCI Emerging Markets 988.22 -0.1
MSCI LatAm 2194.84 0.06
Brazil Bovespa 102800.4 1.28
2
Mexico IPC 53935.93 0.1
Chile IPSA 5247.40 -1.2
Argentina MerVal 253251.0 -0.568
7
Colombia COLCAP 1187.69 0.38
Currencies Latest Daily
%
change
Brazil real 5.0690 0.02
Mexico peso 18.0627 -0.04
Chile peso 806 0.31
Colombia peso 4579.48 0.45
Peru sol 3.7706 -0.34
Argentina peso (interbank) 210.7800 -0.19 Argentina peso (parallel) 389 0.77
(Reporting by Shashwat Chauhan & Shreyashi Sanyal in Bengaluru;
Editing by Paul Simao)
