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Brazil launches first sovereign dollar bond since 2021
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Mexican peso dips, lowest in a week
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Chile's peso falls a day after c.bank holds rates
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C.bank of Chile boosts GDP forecast for 2023 but lowers
2024 est
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Brazil's c.bank governor Campos Neto praises Lula's fiscal
rules
(Updates prices, details; adds comment)
By Shashwat Chauhan, Shreyashi Sanyal and Bansari Mayur
Kamdar
April 5 (Reuters) - Brazil's real rose on Wednesday
after positive economic data and optimism about the new fiscal
framework, while Mexico's peso lagged regional peers on worries
of a fallout from the slowdown in the U.S. economy.
The peso shed 0.8% against a firm dollar , hitting its lowest level in a week, as a slew of weak economic data in the U.S. fueled worries about recession in the world's largest economy.
"The way Mexico is positioned, their economy is going to be dependent on working and trading with the U.S. and that will take a hit, it will be weighed down by the recession that will hit the U.S.," said Edward Moya, senior market analyst at Oanda. Domestic data showed consumer prices in Mexico slowed more than expected in the year to March. The Mexican central bank had hiked its key interest rate last week and taken a dovish tone on future moves. Limiting losses on the broader Latam FX index , Brazil's real gained 0.3% after data showed that its services sector rebounded and returned to growth in March at the strongest pace in five months. Signs of easing tensions between President Luiz Inacio Lula da Silva's government and the central bank also supported the real. Brazil's central bank governor Roberto Campos Neto said the Lula government's fiscal efforts so far are positive and have eliminated the risk of a "more uncoordinated" debt trajectory. Neto also said he was not concerned about the political leaning of new directors but rather their technical qualifications for the positions.
In Chile, the peso fell 0.7% against the dollar, a day after its central bank maintained its interest rate at 11.25%. The Central Bank of Chile set the performance of the economy for 2023 at between -0.5% and +0.5% amid the slowdown in activity after the rapid recovery from the COVID-19 pandemic, up from its previous forecast of a decline in activity of between 0.5% to 1.75%. "Following today’s statement, our view for the path of monetary policy is biased towards delaying cuts," said economists at Goldman Sachs, in a note.
"Still, as inflation and inflation expectations consolidate a trend downwards and the positive output gap narrows, we expect the central bank to be able to move its nominal policy rate lower later in the year while upholding a restrictive monetary stance." The Colombian peso extended gains to a third straight day, up 0.3%, as oil prices remained stable after rallying this week on a surprise production cut by OPEC+ on Sunday. Data showed Colombian inflation rose slightly above expectations in March. Meanwhile, the Polish zloty weakened 0.1% against the euro after its central bank held interest rates at 6.75%. Brazil's Treasury announced the issuance of a new 10-year sovereign bond in U.S. dollars, returning to the foreign market after more than a year and a half and gauging investor sentiment toward proposed new fiscal rules.
Key Latin American stock indexes and currencies at 1810 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 986.56 -0.11 MSCI LatAm 2162.36 -1.16
Brazil Bovespa 100689.99 -1.16
Mexico IPC 53383.13 -1.46
Chile IPSA 5221.38 -0.09
Argentina MerVal 251018.88 -0.187
Colombia COLCAP 1182.18 0.31
Currencies Latest Daily %
change
Brazil real 5.0555 0.52
Mexico peso 18.2993 -1.00
Chile peso 809.3 -0.11
Colombia peso 4570.5 0.22
Peru sol 3.7679 -0.19
Argentina peso (interbank) 211.2200 -0.20 Argentina peso (parallel) 387 1.29 (Reporting by Shashwat Chauhan, Shreyashi Sanyal and Bansari
Mayur Kamdar in Bengaluru; Editing by Marguerita Choy and Josie
Kao)
