Business

Mexican peso slips ahead of expected rate hike; Latam FX dips

Article content

The Mexican peso fell ahead of an

expected 75 basis point hike by its central bank later on

Article content

Thursday as Latin America’s second-largest economy strived to

tackle stubbornly high inflation and follow in the steps of an

increasingly hawkish U.S. Federal Reserve.

Latin American currencies declined 0.4% in

early trading, with Mexico’s peso slipping 0.3% against

the dollar.

The Bank of Mexico is expected to raise its key interest

rate to a record 9.25% later in the day, following the Fed’s

Advertisement 2

Article content

recent 75 basis point hike.

Annual inflation in Mexico hit 8.76% in the first half of

September, official data showed last week.

The Brazilian real, dipped 0.5%, adding to its

steep losses earlier this week, even as the central bank

improved its economic growth outlook for 2022 and data showed

Brazil created more formal jobs than expected in August.

Nonetheless, the currency of Latin America’s largest economy

is headed for decline of over 4% this month as market volatility

adds to a risk-off mood ahead of Brazil’s presidential

elections.

“Positioning in both the BRL (real) and rates appears to be

relatively light, and we see room for a rally with the elections

out of the way. Brazil is one of the few countries in EM where

Advertisement 3

Article content

inflation has peaked and the BCB (Banco Central do Brasil) is

basically done,” wrote analysts at Citi in a note.

Voters in Brazil head to the polls for a first-round

presidential vote on Oct. 2, with former President Luiz Inacio

Lula da Silva expanding his lead over the incumbent far-right

President Jair Bolsonaro in the latest polls even as fears of

post-election turmoil persist.

The Colombian peso fell 0.9% against the dollar ahead

of a decision by country’s seven-member central bank board on

whether to continue sharp rate hikes or moderate its increases,

as inflation pressures and robust domestic consumption endure.

Chile’s peso dropped 1.3% after sharp gains in the

previous session, while the Peruvian sol slipped 0.2%.

Advertisement 4

Article content

Data showed Chile’s unemployment rate came in at 7.9% in the

June-August period, flat from the quarter through July.

Regional stocks fell 1.1%.

Elsewhere, the Czech National Bank kept interest rates

unchanged on Thursday as expected and Kenya’s central bank

raised its benchmark lending rate by 75 basis points.

Key Latin American stock indexes and currencies at 14:59

GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 874.47 -0.16

MSCI LatAm 2027.03 -1.08

Brazil Bovespa 106529.59 -1.77

Mexico IPC 45176.58 -0.58

Chile IPSA 5080.60 -0.39

Argentina MerVal 135998.36 -1.467

Colombia COLCAP 1121.93 -0.74

Currencies Latest Daily %

change

Brazil real 5.4020 -0.99

Mexico peso 20.1992 -0.41

Chile peso 968.9 -1.38

Colombia peso 4525.73 -0.92

Peru sol 3.9388 -0.17

Argentina peso 147.1000 -0.16

(interbank)

Argentina peso 286 1.40

(parallel)

(Reporting by Bansari Mayur Kamdar and Susan Mathew in

Bengaluru; Editing by Andrea Ricci)

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Share this news on your Fb,Twitter and Whatsapp

File source

NY Press News:Latest News Headlines
NY Press News||Health||New York||USA News||Technology||World News

Tags
Show More

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button
Close