Latin American currencies are under pressure from a strong dollar as traders await remarks from Federal Reserve Chair Jerome Powell on U.S. interest rates, while the Chilean peso reaches a three-week high; meanwhile, Argentina stocks are seen as a "safeguard of value" amid economic turmoil, but the country faces opposition to joining the BRICS bloc.
The Latin American currencies index reversed its early loss and gained 0.2% as the dollar lost steam and traders analyzed Federal Reserve Chair Jerome Powell's comments on further rate hikes.
The Brazilian real strengthened as iron ore prices rose, while Chile's peso weakened due to falling copper prices; Mexico's peso declined for the third consecutive session; Petrobras shares fell after the company halted some asset sales; Israel's shekel gained after the central bank left interest rates unchanged; trading volumes were low due to the Labor Day holiday in the US.
Most Latin American currencies fell as the dollar strengthened on robust U.S. economic data, with the Mexican peso leading the declines, while Chile's peso gained after the central bank cut its benchmark interest rate and lowered its economic growth forecast for 2023.
Emerging market currencies are expected to struggle to recover from their losses this year due to high U.S. Treasury yields, safe-haven demand, and a slowing Chinese economy, keeping the dollar strong, according to a Reuters poll of FX analysts.
Latin American currencies are experiencing their worst week in four weeks due to the stronger US dollar and concerns about China's economic growth, with Chile's peso hitting a nine-month low, while Brazil's real slipped and Colombia's peso advanced slightly.
Latin American currencies and stocks are set for their biggest weekly increases in months, benefiting from a stabilizing Chinese economy, rallying commodity prices, and expectations that the Federal Reserve will stop hiking rates.
Latin American currencies pared gains against the dollar as the U.S. Federal Reserve signaled tighter monetary policy, while Brazilian stocks rose ahead of a rate cut by the central bank.
Most Latin American currencies weakened as the likelihood of tighter U.S. monetary policy reduced appetite for riskier assets, causing the Brazilian real to drop below 5 per dollar for the first time in over a month.
Latin American markets rebounded on Friday as the US dollar weakened, following a challenging quarter for emerging market stocks and currency indexes, which experienced their first quarterly decline since June 2020.
Bitcoin and cryptocurrencies are facing pressure due to the U.S. debt pile, leading to fears of a "debt death spiral" that could boost the bitcoin price.
Latin American currencies were mostly stable as investors evaluated corporate earnings in Mexico and awaited Chile's interest rate decision, while Brazil's real slipped after data showed a continued downward trend in domestic inflation.
