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EMERGING MARKETS-Mexican peso up as inflation rises; other Latam FX, stocks gain

Credit: REUTERS/Edgard Garrido

Latin American currencies rose on Monday, with Mexico's peso extending gains to a fifth straight session, as the dollar weakened ahead of major events this week and on rising base metal prices.

By Susan Mathew

Aug 24 (Reuters) - Latin American currencies rose on Monday, with Mexico's peso extending gains to a fifth straight session, as the dollar weakened ahead of major events this week and on rising base metal prices.

The greenback lost ground against major rivals ahead of the Republican National Convention, at which U.S. President Donald Trump will seek to reboot his election campaign. Eyes will also be on Federal Reserve Chair Jerome Powell's address on Thursday about the U.S. central bank's monetary policy framework review. FRX/

Global sentiment, meanwhile, got a lift after the U.S. Food and Drug Administration approved the use of blood plasma from patients who have recovered from COVID-19 as a treatment option. Main stock indexes in Latin America rose between 0.1% and 0.7%. Argentina's Merval .MERV, however, lost 1.4%. MKTS/GLOB

Mexico's peso MXN= was up 0.1% after annual inflation in the first half of August increased to 3.99%, above expectations, to the upper end of the central bank's target range.

The data "will probably prompt the central bank to slow the pace of its easing cycle. But with inflation set to drop back over the coming months, we still think interest rates will fall by more than most expect this year," Capital Economics wrote in a note.

Brazil's real BRBY rose steadily from three-month lows. The World Health Organization on Friday said the coronavirus crisis appears to be leveling off, if not easing, in the world's second biggest COVID-19 hot spot. Brazil had registered more than 3.6 million cases as of Sunday.

On Monday, Brazil's lower house speaker Rodrigo Maia said the country's congress will focus on the government's spending ceiling rule and tax and administrative reforms for the remainder of this year, and expects other key economic reforms to be passed next year.

The real has been facing increased pressure amid a slew of ministerial resignations and worries about the country's fiscal position.

Chile's currency COP= led gains in the region, up 1%, as copper prices rose, while the Colombian peso COP= was flat. MET/LO/R

Colombia's government on Friday launched an effort to attract $11.5 billion in non-energy related foreign investment between now and 2022, in a bid to create jobs. The plan includes tax incentives and bureaucratic simplifications.

In Argentina, approval by creditors of its debt restructuring offer is being eyed ahead of a Friday deadline. Investors are now looking for macroeconomic reforms and International Monetary Fund support to regain confidence.

Key Latin American stock indexes and currencies at 1427 GMT:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1109.48

1.61

MSCI LatAm .MILA00000PUS

1970.88

0.97

Brazil Bovespa .BVSP

102252.67

0.72

Mexico IPC .MXX

38214.43

0.31

Chile IPSA .SPIPSA

4000.01

0.13

Argentina MerVal .MERV

46759.10

-1.376

Colombia COLCAP .COLCAP

1193.07

0.57

Currencies

Latest

Daily % change

Brazil real BRBY

5.6011

0.08

Mexico peso MXN=D2

21.9280

0.15

Chile peso CLP=CL

786.3

0.92

Colombia peso COP=

3836.26

-0.08

Peru sol PEN=PE

3.5768

0.16

Argentina peso (interbank) ARS=RASL

73.7200

-0.19

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

((susan.mathew@thomsonreuters.com; +91-80-6287-2704;))

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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