Mexico's peso rose against the dollar after central bank minutes and inflation data indicated that interest rates would remain on hold for longer, while the BRICS group invited Argentina and five other countries to join the bloc.
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.
Latin American currencies rose, with the Brazilian real leading the gains, ahead of economic data, while Petrobras halted some asset sales after a review, and a Brazilian court approved the debt restructuring plan of Samarco.
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.
Central banks across major developed and emerging economies took a breather in August with lower interest rate hikes amid diverging growth outlooks and inflation risks, while some countries like Brazil and China cut rates, and others including Turkey and Russia raised rates to combat currency weakness and high inflation.
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.
The Mexican peso and other Latin American currencies strengthened as a weaker dollar and positive economic data from China boosted metal prices and supported resource-rich countries in the region.
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.
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.
Latin American currencies are facing downward pressure due to concerns about U.S. interest rates and weak copper prices, with the Brazilian real hitting a four-month low after disappointing industrial output data.
