By Bansari Mayur Kamdar
Feb 7 (Reuters) – Currencies in Latin America outperformed the broader emerging market, with top copper producer Chile’s peso leading gains as metal prices recovered.
The peso CLP= rose 0.6% to 799 against the greenback, as prices of the red metal rebounded from a four-week low in the previous session on easing risk-off sentiment and a pause in dollar rally.
Chile also saw exports of the red metal reach $2.98 billion in January, down 21.6% from a year earlier, the central bank said, while trade surplus in January exceeded expectations.
World’s no.2 copper producer Peru’s sol PEN= added 0.3% by 1450 GMT.
Optimism around the recovering in demand in China and concerns over supply shortages following the shutdown of a major export terminal after an earthquake in Turkey supported crude prices. Oil producer Mexico’s peso MXN= rose 0.5%.
The peso is set to pare its advance of recent months but will keep trading at firm levels, helped by the central bank’s aggressive policy tightening to combat elevated inflation, a Reuters poll showed.
The Colombian peso COP= was subdued after the government on Monday presented a $247.1 billion four-year development plan to the country’s lawmakers, laying out details of its projected social and economic investments.
Elsewhere in the emerging markets, trading on the Istanbul stock market was halted for a second time as a market-wide circuit breaker kicked in following heavy losses in the wake of Monday’s devastating earthquake in Turkey and neighboring Syria.
“The earthquakes are a humanitarian disaster and a negative shock for the (Turkish) economy,” said Hasnain Malik, managing director of emerging and frontier markets equity strategy at Tellimer.
The emerging markets currencies index .MIEM00000CUS slipped 0.2%, lagging the 0.3% climb in their Latin American peers .MILA00000CUS.
Overall, emerging market currencies are expected to drift higher in coming months, helped by improved global growth prospects due to the reopening of China’s economy, a Reuters poll of 40 foreign exchange strategists found.
Limiting gains on the Latam FX index, Brazil’s real BRL= fell 0.9% against the dollar.
Brazil’s central bank expressed concern at increased inflation expectations, saying that a fiscal framework revision and government stimulus package may lead to upward pressure on consumer prices.
This comes amid criticism from Brazilian President Luiz Inacio Lula da Silva that there was “no explanation” for the country’s high interest rates, with the benchmark rate at a six-year high.
Stocks in Latin America .MILA00000PUS edged 0.3% lower, with Brazil’s Bovespa .BVSP and Mexico’s IPC .MXX down 0.1% each.
Key Latin American stock indexes and currencies at 1450 GMT:
Stock indexes
Latest
Daily % change
MSCI Emerging Markets .MSCIEF
1014.17
-0.03
MSCI LatAm .MILA00000PUS
2216.01
-0.24
Brazil Bovespa .BVSP
108604.78
-0.11
Mexico IPC .MXX
53978.85
-0.13
Chile IPSA .SPIPSA
5286.66
0.02
Argentina MerVal .MERV
246644.95
1.247
Colombia COLCAP .COLCAP
1268.41
-0.01
Currencies
Latest
Daily % change
Brazil real BRBY
5.1903
-0.32
Mexico peso MXN=D2
19.0729
0.46
Chile peso CLP=CL
798
0.50
Colombia peso COP=
4785.25
-0.04
Peru sol PEN=PE
3.8426
-0.19
Argentina peso (interbank) ARS=RASL
189.4100
-0.15
Argentina peso (parallel) ARSB=
371
0.54
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Arun Koyyur)
(([email protected]; Twitter: @BansariKamdar;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
