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EMERGING MARKETS – Latin currencies hit by rising dollar after US jobs data

By on August 6, 2021 0

* Real Brazil overall for weekly losses as political tensions weigh in * Mexican peso limited rise seen – analyst * Chilean peso drops on Escondida strike plan * JBS and Lojas Americanas rally By Susan Mathew Aug 6 (Reuters) – Latin American currencies hit session lows on Friday as the dollar improved after strong U.S. jobs data prompted bets that the U.S. Federal Reserve could bring forward its timetable for reducing stimulus measures. But the Brazilian real fell 0.7% in a volatile session also hampered by political tensions ahead of next year’s elections. The currency is expected to mark its third consecutive week in the red. A Brazilian congressional committee voted Thursday against a constitutional amendment to pass printed ballots, in a major defeat for far-right President Jair Bolsonaro, whose popularity has plunged. “Domestic political turmoil combined with a resurgence of concerns over spending caps are creating conditions in which the currency will only benefit the central bank (a hawkish) to a limited extent,” Commerzbank analysts warned. The Mexican peso was stable, but was expected to end the week slightly lower. “With the increase in (coronavirus) infection figures, concerns are likely to grow in the future that further restrictions could slow the economic recovery (in Mexico) and therefore also central bank actions,” said Commerzbank. “Against this backdrop and given the global risks, we continue to see only limited potential for MXN to recover.” As the dollar rose, the Chilean peso fell 0.4%. The union representing workers at Chile’s Escondida copper mine, the world’s largest, on Thursday called on its members to prepare for a strike amid slow contract negotiations negotiated by the government. The currency is down nearly 3% for the week, its worst in seven weeks. Among the actions, Brazilian retailer Lojas Americanas has sought to end a three-day winning streak after saying it had “preliminary contact” with clothing retailer Marisa Lojas, prompting bets for an offer. Meatpacker JBS has jumped more than 2% on its deal to buy Australian fish farmer Huon Aquaculture Group in a cash deal for A $ 425 million ($ 314.12 million). On bonds, JPMorgan turned net bullish on emerging market sovereign and semi-sovereign debt in hard currencies by overweighting the EMBI Global Diversified Index, the investment bank said. Main Latin American Stock Indices and Currencies at 13:51 GMT: Stock Market Indices Latest Daily Change in% MSCI Emerging Markets 1,292.17 -0.61 MSCI LatAm 2,479.58 -1.35 Brazil Bovespa 121,904.21 0.22 Mexico CPI 51,189.04 0.11 Chile IPSA 4,255.90 0.36 Argentina MerVal – – Colombia COLCAP 1,231.34 0.33 Currencies Latest Daily change in% Brazilian real 5.2499 -0.65 Mexican peso 19.9565 -0, 21 Chilean peso 780.7 -0.49 Colombian peso 3,918.81 -0.12 Peruvian sol 4.0682 -0.13 Argentine peso 96.9000 -0.01 (interbank) (Report by Susan Mathew in Bengaluru; edited by Jonathan Oatis)