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Brazil's real hits ten-month high
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Colombian peso rises for ninth straight day
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Peru's sol rises ahead of interest rate decision
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Bank of Mexico minutes strike more dovish tone
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Latam FX up 0.3%, stocks rise 0.3%
(Updates prices)
By Shashwat Chauhan and Bansari Mayur Kamdar
April 13 (Reuters) - Peru's sol rose on Thursday ahead
of a monetary policy decision, with its peers in the Latin
American region also gaining against a softer dollar as fresh
evidence of cooling price pressures bolstered hopes of a less
aggressive Federal Reserve.
The MSCI's Latin American currencies index added 0.3% by 1836 GMT, extending gains for a third straight
session and hitting a fresh eight-year high.
The dollar index slid to its lowest level since
February after official data showed U.S. producer prices
unexpectedly fell in March.
The data followed a report on Wednesday showing cooling U.S. consumer prices growth, fuelling hopes that the Fed could pause its market-punishing rate hikes soon. Peru's sol rose 0.3% against the dollar ahead of its central bank's decision at 2300 GMT at which the Banco Central de Reserva del Perú (BCRP) is expected hold its lending rate steady at 7.75% . "The BCRP, like us, expected a clear decline in inflation beginning in March, which has not materialized yet," said Mario Guerrero, Deputy Head Economist at Scotiabank in a note. Guerrero notes that 12-month inflation expectations remain stable, though are still well above the target range. Added to this is the fact that underlying inflation continued to rise, so these factors make it likely that the pause in the interest rate hike cycle that began in February will continue. The Colombian peso led gains among regional peers, rising 1.2% against the dollar and was set to extend its rally for a ninth straight session. The Chilean peso gained 1.1%, rising for the third straight day, as the world's largest copper producer benefited from higher red metal prices. Copper prices touched their highest in nearly two weeks, buoyed by upbeat trade data from top metals consumer China and a weaker dollar after U.S. inflation cooled. The Mexican peso was up 0.4% at a more than one-week high after minutes from the Bank of Mexico's March meeting showed board members discussing the possibility of an end to the bank's rate-hiking cycle. Brazil's real edged 0.4% higher against the greenback, after having briefly touched its highest level in ten months earlier in the session. Finance Minister Fernando Haddad said Brazil's central bank has an opportunity to lower interest rates to help boost economic growth as fiscal and monetary policies are converging. Latin American stocks advanced 0.3%, with Mexican stocks leading regional gains. Brazilian stocks , however, slipped 0.3%. Elsewhere in emerging markets, the Czech crown rose to its highest against the euro since July 2008 as inflation data chimed with the central bank's hawkish tone. Pakistan's international bonds rose as much as 1.2 cents to trade between 34 cents and 46 cents in the dollar, data from Tradeweb showed. Ghana expects the International Monetary Fund's board to approve a $3 billion loan by the end of the second quarter of 2023, Finance Minister Ken Ofori-Atta said in a presentation on Thursday.
Key Latin American stock indexes and currencies at 1836 GMT:
Stock indexes Latest Daily % change
MSCI Emerging Markets 998.25 0.47 MSCI LatAm 2305.43 0.4 Brazil Bovespa 106577.98 -0.29 Mexico IPC 54692.67 0.66 Chile IPSA 5341.03 -0.23 Argentina MerVal 271269.44 1.656 Colombia COLCAP 1235.57 0.27 Currencies Latest Daily % change
Brazil real 4.9185 0.44
Mexico peso 18.0132 0.28 Chile peso 795.5 1.09
Colombia peso 4408.5 1.15
Peru sol 3.7699 0.34
Argentina peso 214.6700 -0.20
(interbank) Argentina peso 396 0.51
(parallel) (Reporting by Shashwat Chauhan, Bansari Mayur Kamdar and Amruta
Khandekar in Bengaluru; Editing by Christina Fincher and Diane
Craft)
