EMERGING MARKETS-Colombian peso hits lowest in a month on weak oil price
By Shreyashi Sanyal and Susan Mathew
July 28 (Reuters) - The Colombian peso touched its lowest in four weeks on Tuesday as weaker crude prices pressured the oil exporter's currency after talks for a U.S. coronavirus aid package stalled, feeding fears about the fuel demand outlook in the world's largest consuming country.
The peso COP= fell 1.2% against the dollar. Oil prices weakened as U.S. congressional Democrats criticized as inadequate a $1 trillion aid package that U.S. Senate Republicans proposed on Monday. MKTS/GLOB
Investors eyed a Colombian central bank policy meeting at the end of the week, with expectations for a 25-basis-point cut to the key lending rate.
Other currencies in Latin America were flat to higher against the dollar which steadied after bouncing off two-year lows. Analysts expected further weakness in the greenback on rising bets that the U.S. Federal Reserve will maintain very loose monetary policies at the end of its two-day meeting on Wednesday.
"Fed officials have made clear that they will be making their forward guidance more dovish and outcome-based soon," analysts said in a TD Securities client note.
Brazil's real BRBY erased early losses to trade 0.2% higher. Data showed Brazil posted a record current account surplus in June, and attracted portfolio inflows for the first time since before the pandemic.
Separately, official figures showed Brazil's labor market may be over the worst of the coronavirus crisis after losing 1.2 million formal jobs in the first half.
Brazil stocks .BVSP rose 0.1% with Carrefour Brasil CRFB3.SA up 4.7% after reporting stronger-than-expected quarterly results.
Mexico's peso MXN= traded marginally higher after retracing early losses. The national oil company Pemex said losses narrowed during the second quarter, although Latam's most heavily indebted company said its debt rose nearly $2.4 billion to $107.2 billion.
On Thursday, data is expected to show Mexico's economy contracted at historic levels of 17.7% in the second quarter, according to a Reuters poll of analysts.
Argentine over the counter bonds RPLATC fell an average 0.7%. The country's main creditors said their latest debt restructuring proposal has support from investors holding more than half the country's foreign debt, bolstering their case for countering the government's most recent offer.
The broader emerging market currency index .MIEM00000CUS was pressured by a tumble in the Turkish lira TRY= which analysts said reflected pent-up selling pressure that has been restrained by interventions to keep the currency stable.
Key Latin American stock indexes and currencies 1923 GMT:
Daily % change
MSCI Emerging Markets .MSCIEF
MSCI LatAm .MILA00000PUS
Brazil Bovespa .BVSP
Mexico IPC .MXX
Chile IPSA .SPIPSA
Argentina MerVal .MERV
Colombia COLCAP .COLCAP
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
(Reporting by Shreyashi Sanyal in Bengaluru; editing by Jonathan Oatis and David Gregorio)
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