EMERGING MARKETS-Latam FX slip as as G7 statement on coronavirus disappoints
By Susan Mathew
March 3 (Reuters) - Latin American currencies weakened on Tuesday after a statement from financial officials from the G7 countries failed to detail concrete measures to help economies stabilize from damage caused by a fast-spreading coronavirus outbreak.
Against a stronger dollar, the currencies of Brazil BRL= and Mexico MXN= both weakened about 0.7%, with the peso giving back most of Monday's gains.
After a severe whipping last week, markets around the globe breathed a sigh of relief on Monday as major central bank officials raised hopes that necessary action would be taken to support markets as the virus spread fast and far beyond China where it originated. MKTS/GLOB
Markets had pinned hopes on the Group of Seven outcome, but the extended recovery on Tuesday was cut short after the G7 merely reiterated that message after a conference call with its finance ministers and central banks governors.
"The statement does not point to a near-term coordinated action. Rather, it suggests individual central banks will make their own decisions regarding the appropriate timing and size of policy actions," said Andrew Hollenhorst, chief U.S. economist at Citi Research.
"This will come as a modest disappointment to risk-asset investors who were expecting a more concerted easing effort."
Chile's peso CLP= traded flat. It pared early gains of as much as 0.3% lifted by a rise in its biggest export revenue item, copper. MET/L
Colombia's currency COP= slipped 0.6% taking no solace from rising oil prices. The currency had gained almost 2% last session, posting its best day in seven months. O/R
"Monetary and financial policies...cannot solve the underlying issue - prevent the spread of the coronavirus," wrote Thu Lan Nguyen, an analyst at Commerzbank.
Regional stocks swung wildly, mirroring movements in U.S. futures. .N
Brazil stocks .BVSP traded flat, having swung more than 0.3% both ways. Food processor BRF SA BRFS3.SA gave up early gains of as much as 1.2% to trade 3.5% lower. The company posted its first annual profit, with fourth quarter profit jumping 121%.
Iron ore miner Vale VALE3.SA was the biggest boost, tracking a rise in prices of the steel-making ingredient. IRONORE/
Chile stocks .SPIPSA rose 0.3%, but the world's No. 2 lithium producer SQM SQMA.SN, SQMB.SN fell after it reported a slump in profits in the last quarter of 2019 and warned that early 2020 sales in China could be hit by coronavirus.
Key Latin American stock indexes and currencies at 1400 GMT:
Stock indexes
Latest
Daily % change
MSCI Emerging Markets .MSCIEF
1027.09
0.99
MSCI LatAm .MILA00000PUS
2481.56
0.05
Brazil Bovespa .BVSP
106558.55
-0.06
Mexico IPC .MXX
-
-
Chile IPSA .SPIPSA
4294.36
0.25
Argentina MerVal .MERV
-
-
Colombia COLCAP .COLCAP
-
-
Currencies
Latest
Daily % change
Brazil real BRBY
4.5030
-0.39
Mexico peso MXN=D2
19.5460
-0.75
Chile peso CLP=CL
812.8
-0.02
Colombia peso COP=
3480.47
-0.59
Peru sol PEN=PE
3.4458
-0.14
Argentina peso (interbank) ARS=RASL
-
-
(Reporting by Susan Mathew in Bengaluru; Editing by Alistair Bell)
((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.
