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EMERGING MARKETS-Latam FX fall on global risk-off mood, Chilean peso hits 2-month low

Credit: REUTERS/RODRIGO GARRIDO

Latin American currencies fell on Thursday as the dollar gained on dwindling risk sentiment due to rising conoronavirus cases globally, while Chile's peso hit its lowest level in nearly two months ahead of a central bank policy meeting.

By Shreyashi Sanyal

Oct 15 (Reuters) - Latin American currencies fell on Thursday as the dollar gained on dwindling risk sentiment due to rising conoronavirus cases globally, while Chile's peso hit its lowest level in nearly two months ahead of a central bank policy meeting.

The MSCI's index for Latin American currencies .MILA00000CUS fell 0.8%, 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 U.S. dollar =USD rose on worries about new lockdowns in major European countries where cases were spiking.

Brazil's real BRBY, BRL= fell 0.2% 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.

Sao Paulo stocks .BVSP dropped more than 1%, falling for the first time in three days.

The Chilean peso CLP= fell 0.5%, extending its declines to the fourth straight day, ahead of a policy decision by the country's central bank, with analysts expecting the benchmark rate to 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'."

Mexico's peso MXN= and Colombia's peso COP= gave back gains made in the previous session as both currencies of the oil-producing countries 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.

Key Latin American stock indexes and currencies at 1453 GMT:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1117.36

-1.6

MSCI LatAm .MILA00000PUS

1894.92

-1.77

Brazil Bovespa .BVSP

98411.41

-0.93

Mexico IPC .MXX

37830.45

-0.51

Chile IPSA .SPIPSA

3634.71

-0.81

Argentina MerVal .MERV

47088.65

-0.437

Colombia COLCAP .COLCAP

1163.16

-0.7

Currencies

Latest

Daily % change

Brazil real BRBY

5.6209

-0.35

Mexico peso MXN=D2

21.3920

-0.28

Chile peso CLP=CL

802.4

-0.50

Colombia peso COP=

3858.54

-0.56

Peru sol PEN=PE

3.592

-0.06

Argentina peso (interbank) ARS=RASL

77.4500

0.04

Argentina peso (parallel) ARSB=

165

1.21

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

((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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