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Brazil's industrial output up 1.1% in March, above
forecasts
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Brazil central bank sees no financial stability risk
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Chile Senate committee approves mining royalty bill
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S&P says El Salvador debt exchange constituted default
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Latam FX up 0.8%, stocks add 0.4%
By Bansari Mayur Kamdar May 10 (Reuters) - Latin American currencies gained on Wednesday against a weakening dollar after data showing lower-than-expected U.S. inflation raised bets of a pause in Federal Reserve rate hikes. The MSCI index of Latam currencies was up 0.8% at 1355 GMT, tracking the broader market rally. "The broad message is that overall inflation is slowing and that should give the FOMC grounds to keep (U.S.) interest rates unchanged when it next meets on 14 June," said Daniel Casali, chief investment strategist at wealth manager Evelyn Partners.
Brazil's real and the Mexican peso gained by 0.5% and 0.7%, respectively, against the dollar, while Peru's sol slipped 0.2% after four straight sessions of gains.
Also helping the real, data showed industrial production in Brazil rose 1.1% in March from February. Meanwhile, Brazil's central bank said that bank profitability there would continue to face challenges in the medium term as credit risk remains high. However, it said stress tests showed no relevant risk to financial stability in Brazil. Chile's peso edged 0.1% higher against the greenback. The Senate finance committee voted to advance a new mining royalty bill on Tuesday, a day after the Chilean government said it reached a deal with lawmakers to lower the bill's top tax rate on major copper producers. Emerging market stocks advanced 0.4% to their fourth straight session of gains with higher oil and metal prices supporting commodity-heavy stocks.
Ratings agency S&P on Tuesday said a pension debt exchange by El Salvador in April constituted a default event, but added that new terms had remedied the default. Elsewhere, the Pakistani rupee fell to a record low of 288.5 against the dollar, a day after former prime minister Imran Khan was arrested by the anti-corruption agency. The Polish zloty rallied 0.7% against a weaker euro after its central bank held rates steady at 16.75%.
Key Latin American stock indexes and currencies:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 980.36 -0.19 MSCI LatAm 2289.85 0.51
Brazil Bovespa 107330.20 0.2
Mexico IPC 55469.44 0.03
Chile IPSA 5561.92 0.2 Argentina MerVal 0.00 0
Colombia COLCAP 1158.52 -0.09 Currencies Latest Daily %
change
Brazil real 4.9581 0.58
Mexico peso 17.6490 0.56
Chile peso 788.4 0.18
Colombia peso 4546.58 0.44
Peru sol 3.6787 -0.01
Argentina peso (interbank) 228.5000 -0.15 Argentina peso (parallel) 466 0.86 (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by
Alexander Smith)
