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Colombian peso top weekly performer, gains 2%
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Mexican peso down after two weeks of gains
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Stock markets in Argentina, Mexico, Colombia closed
April 6 (Reuters) - The Mexican peso snapped three straight days of declines to bounce from a one-week low on Thursday, while oil exporter Colombia's peso led weekly gains among its Latin American peers on a boost from higher crude prices.
Mexico's peso firmed 0.5% versus the dollar, but still eyed a 1.2% weekly drop on worries that the Bank of Mexico (Banxico) is nearing the end of its rate hiking cycle and of a fallout from a slowdown in the U.S., a major trading partner. "Banxico dropped the hiking bias at its most recent policy decision and said that future movements would depend on the inflation outlook, which is now improving," BofA Global Research strategists wrote in a note.
It is still a close call on whether the central bank will hike at its upcoming meeting in May, they said.
The Mexican central bank also closely watches the U.S. Federal Reserve, which is now expected to pause its rate-hiking cycle amid a slew of weak U.S. economic data.
"Banxico will likely cut when the U.S. Fed cuts, but not before, and not more than the Fed," BofA strategists said. Colombia's peso edged 0.1% higher, eyeing its third straight week of gains, with a near 2% rise largely supported by a jump in oil prices after the Organization of the Petroleum Exporting Countries and allies on Sunday pledged surprise production cuts. Brazil's real slipped 0.6%, paring gains made in the previous session on optimism about the country's new fiscal framework. The real is on track to decline for the week after two straight weeks of gains.
Brazilian Finance Minister Fernando Haddad said the country's central bank has sent "several signs" that government measures to balance public accounts, including a newly proposed fiscal framework, were "consistent". Meanwhile, Santander raised its forecasts for inflation in Brazil. The broader MSCI Latam FX index eyed its first weekly decline after two straight weeks of gains.
Consumer prices in Chile rose 1.1% in March, data showed, roughly in line with market forecasts, as the world's largest copper producer battles stubbornly high inflation. Chile's peso was flat. Elsewhere, a joint copper mining project by Ecuador's state-run ENAMI and Chile's Codelco was told to suspend operations after a court ruling.
Stock markets in Mexico, Argentina and Colombia were closed on account of Holy Thursday.
Key Latin American stock indexes and currencies at 1500 GMT:
Stock indexes Latest Daily % change
MSCI Emerging Markets 984.14 -0.38 MSCI LatAm 2164.53 -0.02
Brazil Bovespa 100664.60 -0.31
Mexico IPC 53498.39 -1.25
Chile IPSA 5244.36 0.16
Argentina MerVal 252848.72 0.541
Colombia COLCAP 1193.57 1.28
Currencies Latest Daily % change
Brazil real 5.0602 -0.22
Mexico peso 18.2370 0.27
Chile peso 809.6 -0.04
Colombia peso 4563.65 0.19
Peru sol 3.7524 0.10
Argentina peso (interbank) 211.2200 -0.20 Argentina peso (parallel) 388 1.03 (Reporting by Shreyashi Sanyal; Additional reporting by
Shashwat Chauhan in Bengaluru; Editing by Jan Harvey)
