EMERGING MARKETS-Chilean peso falls 2%, lower copper prices and stronger dollar weigh


By Shreyashi Sanyal

Nov 17 (Reuters) - The Chilean peso weakened on Wednesday as a dollar rally slammed prices of copper ahead of presidential elections this weekend, while Turkey's lira touched new lows after President Tayyip Erdogan's pledge to keep interest rates low.

MSCI's broader EM index .MIEM00000CUS struggled for direction as the dollar continued to strengthen after solid retail sales data from the United States spurred bets of a sooner-than-expected interest rate hike there. FRX/

A 2% fall in Chile's peso CLP= led losses among Latin American currencies, dropping for the second straight session after prices for its No.1 export, copper, fell. MET/L

In political news, Chile's Senate voted against removing President Sebastian Pinera from office on Tuesday, ending an impeachment process that had successfully passed a lower house vote last week over alleged irregularities in the sale of a mining company.

Chileans are now gearing up to vote in presidential elections on Sunday, in which Pinera is not a candidate.

"Chile's peso has suffered, not only at the hands of politics but also from the decision to allow residents to tap their private pension pots - selling $50 billion worth of assets," said Chris Turner, global head of markets and regional head of research for UK & CEE at ING.

Turkey's lira TRY= fell 2.6% to touch new record lows against a stronger dollar as Erdogan said he will continue his battle against interest rates "to the end", a day ahead of a central bank policy meeting at which it is expected to cut again.

"At this pace, currency weakness and FX reserves depletion will become unsustainable. We soon expect the (central bank) to go into full reverse gear in order to halt the lira's collapse," said Cristian Maggio, head of portfolio strategy at TD Securities.

Erdogan has had influence over monetary policy in the past, with his frequent calls for stimulus and his rapid overhaul of the central bank's leadership.

Latin American currencies were trading in a narrow range after sharp declines in the previous session, with MSCI's index for Latam FX .MILA00000CUS edging 0.2% lower.

Brazil's real BRBY, BRL= fell 0.5% after the country's economy ministry cut its forecasts for GDP growth this and next year, while it raised its outlook for inflation, showing some economic deterioration on its radar.

Colombia's peso COP= weakened 0.6%, down for the sixth straight session even as data from the previous day showed its economy grew 13.2% in the third quarter of 2021 compared with the year-earlier period, higher than analysts expectations.

Key Latin American stock indexes and currencies at 1912 GMT:

Stock indexes


Daily % change

MSCI Emerging Markets .MSCIEF






Brazil Bovespa .BVSP



Mexico IPC .MXX






Argentina MerVal .MERV








Daily % change

Brazil real BRBY



Mexico peso MXN=D2



Chile peso CLP=CL



Colombia peso COP=



Peru sol PEN=PE



Argentina peso (interbank) ARS=RASL



Argentina peso (parallel) ARSB=



(Reporting by Shreyashi Sanyal and Susan Mathew in Bengaluru Editing by Alistair Bell, Kirsten Donovan)

((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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