*
Colombian peso top weekly performer, gains 2%
*
Brazil's Lula hints at inflation target change
*
Stock markets in Argentina, Mexico, Colombia closed
*
Latam FX up 0.1%, stocks add 0.1%
(Updates prices, details)
By Shreyashi Sanyal and Bansari Mayur Kamdar
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 0.4% 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 0.2% 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 shed 0.4%, 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 President Luiz Inacio Lula da Silva hinted that the government might change inflation targets, calling high lending costs "inexplicable" as he continued his push for lower interest rates. 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 declined 1.1%. 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 1850 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 984.75 -0.31 MSCI LatAm 2167.94 0.14
Brazil Bovespa 101010.02 0.03
Mexico IPC 53498.39 -1.25
Chile IPSA 5274.20 0.73
Argentina MerVal 252848.72 0.541
Colombia COLCAP 1193.57 1.28
Currencies Latest Daily %
change
Brazil real 5.0554 -0.12
Mexico peso 18.2315 0.30
Chile peso 818.5 -1.12
Colombia peso 4565 0.16
Peru sol 3.7495 0.18
Argentina peso (interbank) 211.2200 -0.20 Argentina peso (parallel) 388 1.03 (Reporting by Shreyashi Sanyal and Bansari Mayur Kamdar;
Additional reporting by Shashwat Chauhan in Bengaluru; Editing
by Jan Harvey and Deepa Babington)
