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Brazil rates seen on hold at 13.75%
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Chile's Codelco profit hit by lower copper prices and
sales
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Colombia's central bank raises 2023 inflation forecast to 9.5%
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Latam FX up 0.3%, stocks add 0.2%
By Bansari Mayur Kamdar May 3 (Reuters) - Latin American currencies and stocks crawled higher on Wednesday, with investors on tenterhooks ahead of the U.S. Federal Reserve's policy rate decision that will set the tone for markets globally. The MSCI's index for Latin American currencies added 0.3% by 1410 GMT, while regional stocks rose 0.2% after sharp losses the previous session.
Supporting emerging market currencies, the dollar shed 0.4% ahead of the Fed decision at 1800 GMT where the central bank is expected to raise interest rates by 25 basis points and perhaps signal a pause in its 14-month tightening cycle. Brazil's real gained 0.3% against the dollar, with focus also on Banco Central do Brasil's (BCB) interest rate decision at 2100 GMT.
The BCB is expected to keep the benchmark interest rate on hold for the sixth straight meeting, as the central bank waits for unambiguous proof of disinflation before the possible start of an easing cycle in the third quarter, a Reuters poll showed. "We expect the forward guidance to remain conservative given that projected inflation is expected to continue to track above the inflation target," Alberto Ramos, chief Latin America economist at Goldman Sachs, said in a note. "The case for preserving a restrictive stance and remaining vigilant is justified by the still intense services and core inflation pressures, further deterioration of short- and medium-term inflation expectation, growing fiscal and quasi-fiscal stimulus, and above-target inflation forecasts." The Bovespa stocks index slipped 0.3%, extending losses.
Carrefour Brasil fell 4.3% after reporting a first quarter net loss of 113 million reais ($22.39 million), hit by high investment costs at its acquired food retailer Grupo BIG. The Mexican peso gained 0.2% against the greenback. The Mexican government is not currently considering giving state oil company Petroleos Mexicanos a capital injection this year to help pay upcoming debt, said Deputy Finance Minister Gabriel Yorio in an interview with Bloomberg News.
Colombia's peso gained 0.3% against the dollar.
The technical team of Colombia's central bank on Tuesday raised its outlook for 2023 inflation amid persistent consumer price growth. Chile's peso rose 0.2% against the dollar and stocks added 0.1%. Chile's Codelco, the world's largest copper producer, posted a 73% drop in its pre-tax profit for the first three months of this year, which the company said was primarily due to both lower prices and sales volumes. The Peruvian sol climbed 0.2% against the dollar, while the Argentinian peso rose 1.5% to 467 per dollar in popular black markets. Elsewhere in emerging markets, the Czech crown inched 0.4% up after its central bank kept interest rates unchanged, as expected. Malaysia's ringgit extended gains after its central bank surprisingly hiked interest rates by 25 basis points.
Key Latin American stock indexes and currencies:
Stock indexes Latest Daily % change MSCI Emerging Markets 969.87 -0.42 MSCI LatAm 2188.61 0.21 Brazil Bovespa 101793.04 -0.13 Mexico IPC 55110.82 -0.12 Chile IPSA 5377.46 0.15 Argentina MerVal 0.00 0 Colombia COLCAP 1165.06 0.61
Currencies Latest Daily % change Brazil real 5.0270 0.37 Mexico peso 17.9514 0.13 Chile peso 808.2 0.16 Colombia peso 4675.78 0.25 Peru sol 3.7039 -0.10 Argentina peso (interbank) 225.1000 -0.20 Argentina peso (parallel) 467 1.50 (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Emelia Sithole-Matarise)
@BansariKamdar;))