EMERGING MARKETS-Mexican peso leads Latam FX lower as oil slides
By Medha Singh
Sept 21 (Reuters) - Latin American stocks and currencies took a beating on Monday as investors worried that rising COVID-19 cases could deal another setback to the global economy, and as sliding oil and copper prices added pressure to the region's exports.
The safe haven U.S. dollar .DXY caught a bid and Wall Street stocks sold off on concerns that a resurgence of COVID-19 infections this autumn could trigger another round of business shutdowns and threaten a fragile economic rebound. .N
The Mexican peso MXN= fell 1.7% and the Colombian peso COP= shed 1.5%, leading losses among Latin American currencies as crude prices weakened on the prospects of that Libyan production would rise even as global demand stays weak. O/R
The Chilean peso CLP= fell to its lowest in nearly two weeks as prices of copper, the biggest source of Chile's export revenue, retreated from a two-year high. MET/L
Attention also turned to central bank meetings in Mexico on Thursday and Colombia on Friday.
After delivering five consecutive 50-basis-point reductions in interest rates to support an economy struggling with the impact of coronavirus pandemic, Banxico is expected to trim rates by 25 basis points to 4.25% this week.
"The Board could slow down the pace of easing, in response to concerns about the stability of financial markets and the recent increase in inflation," wrote Citigroup strategist Dirk Willer wrote in a note to clients.
Willer expects another cut of the same magnitude in November, and then maintaining the rate at 4% throughout 2021.
Argentine peso ARS=RASL hit another all-time low, extending a slide from last week when its central bank further tightened currency controls in a bid to protect its dwindling dollar reserves.
A major Buenos Aires stock index .MERV shaved off about 3%, the most among LatAm equities that were broadly trading lower. Materials and financials stocks pulled Brazil's Bovespa .BVSP down 2% while equities in Mexico .MXX and Colombia .COLCAP lost about 1.5% each.
Key Latin American stock indexes and currencies at 1445 GMT:
Stock indexes
Latest
daily % change
MSCI Emerging Markets .MSCIEF
1108.53
0.15
MSCI LatAm .MILA00000PUS
1969.93
-1.68
Brazil Bovespa .BVSP
96188.77
-2.14
Mexico IPC .MXX
35441.55
-1.6
Chile IPSA .IPSA
3641.97
-2.5
Argentina MerVal .MERV
40305.29
-2.842
Colombia IGBC .COLCAP
1189.27
-1.43
Currencies
Latest
daily % change
Brazil real BRBY
5.4671
-1.66
Mexico peso MXN=D2
21.5650
-2.03
Chile peso CLP=CL
773.5
-1.33
Colombia peso COP=
3795.4
-1.75
Peru sol PEN=PE
3.5227
0.00
Argentina peso (interbank) ARS=RASL
75.5800
-0.26
(Reporting by Medha Singh in Bengaluru; Editing by David Gregorio)
((Medha.Singh@thomsonreuters.com; within U.S. +1646 223 8780, outside U.S. +91 80 6182 2802; Twitter: https://twitter.com/medhasinghs;))
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