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EMERGING MARKETS-Latam FX index up to 11-week peak as currencies hit multi-month highs

Credit: REUTERS/LUISA GONZALEZ

Mexico's peso scaled nearly a three-month high against a stronger dollar on Thursday, while Brazil's real touched its highest in more than two months, taking an index of Latin American currencies up 1%.

By Susan Mathew

Oct 24 (Reuters) - Mexico's peso scaled nearly a three-month high against a stronger dollar on Thursday, while Brazil's real touched its highest in more than two months, taking an index of Latin American currencies up 1%.

Most other currencies in the region also gained, with Colombia's peso COP= hitting a five-week high, while Chile's currency CLP= jumped as much as 0.9%. MSCI's index of Latam currencies .MILA00000CUS jumped to an 11-week high.

The dollar, which had lost momentum after weak durable goods data out of the United States, strengthened after the euro EUR= and pound GBP= slipped. FRX/

A third day of gains for Brazil's real BRL= came after the Senate gave its final seal of approval for a landmark pension reform on Wednesday. The bill now awaits presidential ratification, which is expected by Nov. 19.

That follows months of political wrangling that whipsawed the currency. The reform aims to generate targeted savings of 800 trillion reais over the next decade and help stabilize the country's public finances and boost growth.

The central bank on Thursday said Brazil's current account deficit as a share of gross domestic product widened to 2.05% in the 12 months to September.

In Mexico, data showed the economy continued to grow at a sluggish pace, with an improvement in secondary activities, which include manufacturing. Separately, consumer price data showed that annual inflation in the first half of October came in slightly below the consensus forecast.

The peso MXN= rose 0.2%.

Chile's currency CLP= climbed after the central bank delivered a third major rate cut since June amid raging protests over economic inequality. The bank cut the benchmark interest rate by a quarter of a percentage point to 1.75% after the market close on Wednesday, and said the unrest will have an impact on the economy.

Analysts at Credit Suisse say the recent commitment by certain unions in the mining sector to partake in strikes will likely dent growth further. They expect the bank to cut again in December by 25 basis points.

Among stocks, Brazil's shares .BVSP fell 0.2% to break a three-day winning streak, while Colombian equities .IGBC lost half a percent.

Highway operator CCR SA CCRO3.SA was the top performer on Brazil's Bovespa index after a Citigroup target price hike, while steelmaker Companhia Siderurgica Nacional CSNA3.SA slid to the bottom after reporting a quarterly net loss and cutting its 2019 profit guidance.

Mexican shares .MXX traded steady. A gain in the country's largest retailer, Walmart de Mexico WALMEX.MX, on the back of a quarterly profit beat was offset by a slump in cement maker Cemex CEMEXCPO.MX, which reported a fall in net sales.

Key Latin American stock indexes and currencies at 1425 GMT:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1036.03

0.49

MSCI LatAm .MILA00000PUS

2799.86

0.92

Brazil Bovespa .BVSP

107350.78

-0.18

Mexico IPC .MXX

43547.36

Chile IPSA .SPIPSA

4943.32

0.67

Argentina MerVal .MERV

32566.31

-0.637

Colombia IGBC .IGBC

13070.76

-0.45

Currencies

Latest

Daily % change

Brazil real BRBY

4.0126

0.49

Mexico peso MXN=D2

19.0739

0.18

Chile peso CLP=CL

724.65

0.16

Colombia peso COP=

3380.92

0.31

Peru sol PEN=PE

3.3458

-0.02

Argentina peso (interbank) ARS=RASL

59.3000

-0.51

(Reporting by Susan Mathew in Bengaluru Editing by Paul Simao)

((susan.mathew@thomsonreuters.com; +91-80-6749-1130))

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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