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EMERGING MARKETS-Chilean peso touches two-month low, Latam peers subdued

Credit: REUTERS/RODRIGO GARRIDO

Chile's peso hit its lowest level in nearly two months on Thursday ahead of a monetary policy decision by the central bank later in the day, while other Latin American currencies were range bound as the dollar gained on dwindling risk sentiment.

By Shreyashi Sanyal

Oct 15 (Reuters) - Chile's peso hit its lowest level in nearly two months on Thursday ahead of a monetary policy decision by the central bank later in the day, while other Latin American currencies were range bound as the dollar gained on dwindling risk sentiment.

The Chilean peso CLP= fell 0.6%, extending its declines to the fourth straight day, ahead of a policy decision by the country's central bank at 5 p.m. ET, with analysts expecting the benchmark rate to be left unchanged at 0.5%.

"We think that the bank will mention that the economic recovery is ongoing, but that recent activity data was below expectations due to weakness in the mining sector," said Alonso Cervera, managing director of emerging markets economics research at Credit Suisse.

"We expect the bank to reiterate that it will maintain an elevated monetary impulse for a 'prolonged period'."

The MSCI's index for Latin American currencies .MILA00000CUS fell 0.5%, in what is shaping up to be its first weekly decline in three weeks. The halting of two high-profile COVID-19 vaccine trials this week and the lack of more promising economic data have investors avoiding riskier assets.

The dollar =USD rose on signs the U.S. economy was stalling while fiscal stimulus appeared unlikely before the U.S. presidential electionand on worries about new lockdowns in major European countries where cases were spiking.

Brazil's real BRBY, BRL= fell 0.1% against the dollar, but most declines were limited after a central bank indicator showed domestic economic activity rose 1.06% in August.

The country's central bank also said in a report on financial stability that more Brazilian companies were likely to file for bankruptcy protection by year-end.

Mexico's peso MXN=rose 0.2% after central bank deputy governor Jonathan Heath said the country's economy could potentially see growth above 12% in the third quarter, based on economic modeling.

Colombia's peso COP=fell 0.3%, giving back gains made in the previous session as the oil producer fell on weaker crude prices.

The Argentine peso ARS=RASL steadied after dropping on Wednesday when President Alberto Fernandez said the country will not devalue its currency or seize bank deposits despite a financial crisis compounded by the COVID-19 pandemic.

Latin American bourses followed Wall Street into the red, with MSCI's index for Latam stocks .MILA00000PUS falling 0.8%.

Key Latin American stock indexes and currencies at 1935 GMT:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1120.68

-1.31

MSCI LatAm .MILA00000PUS

1913.82

-0.79

Brazil Bovespa .BVSP

99298.81

-0.04

Mexico IPC .MXX

38034.02

0.02

Chile IPSA .SPIPSA

3661.39

-0.08

Argentina MerVal .MERV

48009.69

1.511

Colombia COLCAP .COLCAP

1162.44

-0.76

Currencies

Latest

Daily % change

Brazil real BRBY

5.6082

-0.12

Mexico peso MXN=D2

21.3010

0.15

Chile peso CLP=CL

803.2

-0.60

Colombia peso COP=

3848.25

-0.29

Peru sol PEN=PE

3.5807

0.25

Argentina peso (interbank) ARS=RASL

77.4700

0.01

Argentina peso (parallel) ARSB=

167

0.00

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by David Gregorio and Andrea Ricci)

((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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