Saturday, December 9, 2023

Latin American currencies fell on continued concerns about high interest rates

SANTIAGO, Sept 27 (Reuters) – Most Latin American currencies posted losses in early trading on Wednesday, amid a global rally in the dollar and lingering concerns about the prospect that the U.S. Federal Reserve (Fed) will maintain monetary tightening for a longer time.

* The dollar hit a 10-month high on Wednesday, sending the euro and sterling to six-month lows and keeping the yen in intervention territory as the prospect of higher US interest rates gripped markets.

* US Treasury bonds firmed after strong trading in recent days, although their yields remained near 16-year highs, giving support to the dollar.

* Meanwhile, Minneapolis Federal Reserve Bank President Neel Kashkari said Wednesday that he was not ready to say that rates had been raised enough to bring inflation back to the 2% target. He said he expected the US central bank to hold steady next year, after a likely final rate hike this year.

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* The Mexican peso traded at 17.6422 per dollar, with a loss of 0.67% compared to the Reuters reference price on Tuesday, amid a global strengthening of the dollar on growing concerns that interest rates in the United States will remain high and higher. long term and its possible impact on the economy.

* “The failures are not exclusive to the Mexican currency, because around the world, the fall continues to be reported in the values ​​of the highest risk assets,” said the company CIBanco in an analysis note. In the last three days, the peso decreased by 2.58%.

* The main stock index S&P/BMV IPC, which covers the 35 most liquid companies in the Mexican market, gained 0.56%, to 51,397.20 units, after four consecutive days of losses , following a rebound in overseas markets, as investors assimilated new US economic data.

* “The main stock market around the world is moving with a small gain, in what could be a technical rebound after the sharp fall in recent days,” said the CIBanco company in a analysis note.

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* The Brazilian real fell by 0.61%, to 5.0191 units per dollar, while the Bovespa index of the Sao Paulo B3 stock exchange increased by 0.57%, to 114,839.38 points.

* Outstanding loans in Brazil rose 1.1% in August compared to the previous month, but continued to lose momentum on an annual basis, according to Central Bank data published on Wednesday.

* In Argentina, the peso was quoted at 350.10 per dollar at the price set by the central bank, while the Merval stock index rose by 1.32%, to 550,428.04 units, due to the selective acquisition of positions at attractive values after a set of six consecutive tires on negative terrain.

* “The market has bounced back after being hit by the decline in the US market and internal uncertainty ahead of the election,” said a stock market operator.

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* Short-term political and economic doubts point to the elections to be held on October 22, where Javier Milei, who proposes the dollarization of the economy and the abolition of the central bank, leads the polls, leaving the Minister of Economy and candidate, Sergio Massa and center-right leader Patricia Bullrich.

* The Chilean peso marked an exception and rose 0.30%, to 902.10/902.40 per dollar. Meanwhile, the main index of the Santiago Stock Exchange, the IPSA, gained 0.26%, to 5,777.56 units.

* The Colombian peso fell 0.68% to 4,095.11 units per dollar, its fifth consecutive day of decline; while the MSCI COLCAP stock index recovered 0.46% to 1,094.59 points.

* The Peruvian currency, the sol, fell by 0.08% to 3.782/3.789 units per dollar. Meanwhile, the Lima Stock Exchange benchmark is operating stable at 588.84 points.

Nation World News Desk
Nation World News Desk
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