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Brazil's real, Chilean peso lead gains
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Consumer prices in Brazil decelerate in March
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Mexico industrial output rises in Feb from Jan
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Latin American FX up 1.1%, stocks up 3.8%
(Updates prices, adds comment)
By Shashwat Chauhan and Bansari Mayur Kamdar
April 11 (Reuters) -
Latin American currencies touched a five-year high on Tuesday as the dollar slid ahead of Wednesday's U.S inflation data that could offer more clarity on the Federal Reserve's future monetary policy path. The MSCI's Latin American currencies index rose 1.1% by 18:08 GMT, to its highest level since 2018. "The USD's downtrend could stall a bit in the short-term, aided by the expectations of another Fed hike next month. However, much will hinge on the near-term data releases, especially the March CPI print," wrote TD Securities strategists in a note.
The Brazilian real rose 1.3% against the greenback, touching its highest level in over two months. Brazil's consumer prices showed a deceleration in March compared to the previous month, fueling expectations of monetary easing. "When it comes to Brazil, their own energy independence, their own push for reforms and trying to cooperate better with trade, is adding to the attractiveness going into EM and into the real (BRL) specifically," said Juan Perez, director of trading at Monex.
Brazil's Finance Minister Fernando Haddad said on Tuesday that there will be space for interest rate cuts with "increased confidence in the country's fiscal framework and a fiscal consolidation path consistently affecting inflation expectations". The Chilean peso rose 1.2% as a softer greenback offered support to copper prices, aiding the currency of the world's largest copper producer. Chile is expected to maintain its benchmark interest rate at 11.25% in its upcoming meetings in May and June, a poll of analysts said on Tuesday. Currency of Peru , the second biggest copper producer after Chile, advanced 0.5%.
Colombia's peso gained 1.1% against the dollar, as the oil producer's currency benefited from steady oil prices. The recent bounce in commodity prices, coupled with a weakening U.S. dollar, has boosted Latin American currencies 9.2% since the start of the year. Mexico's peso , was the outlier on Tuesday, slipping marginally in choppy trade. Data showed Mexico's industrial output rose 0.7% in February from January. Latin American stocks rose 3.8%, helped by a 4.4% gain in Brazil's Bovespa index as mining stocks such as Vale rallied. The International Monetary Fund trimmed its 2023 global growth outlook slightly as higher interest rates cool activity but warned that a severe flare-up of financial system turmoil could slash output to near recessionary levels.
The IMF also pegged
economic growth in Latin America and the Caribbean at 1.6% in 2023 and 2.2% in 2024.
Key Latin American stock indexes and currencies at 1808 GMT:
Stock indexes Latest Daily % change
MSCI Emerging Markets 995.99 0.74 MSCI LatAm 2262.35 3.74 Brazil Bovespa 106178.67 4.25 Mexico IPC 54480.88 0.75 Chile IPSA 5298.66 0.34 Argentina MerVal 261879.57 1.999 Colombia COLCAP 1212.29 1 Currencies Latest Daily % change
Brazil real 5.0025 1.26
Mexico peso 18.1688 -0.04 Chile peso 808.6 1.22
Colombia peso 4503.36 1.16
Peru sol 3.7771 -0.21
Argentina peso 213.7600 -0.17
(interbank) Argentina peso 389 0.51
(parallel) (Reporting by Shashwat Chauhan, Bansari Mayur Kamdar and Amruta
Khandekar in Bengaluru
Editing by Nick Zieminski)
