US Markets

EMERGING MARKETS-Most Latam currencies rise; Colombian peso at 5-week high

Credit: REUTERS/LUISA GONZALEZ

Rising oil prices lifted crude exporter Colombia's peso to a five-week high on Wednesday, while Brazil's real extended gains to a sixth session and stocks hit record highs on economic growth prospects.

By Susan Mathew

June 2 (Reuters) - Rising oil prices lifted crude exporter Colombia's peso to a five-week high on Wednesday, while Brazil's real extended gains to a sixth session and stocks hit record highs on economic growth prospects.

The real BRBY was up 0.4% and the Bovespa stock index .BVSP also extended gains to a sixth straight session and hit an all-time high of 128,620.25.

The real had rallied 1.3% on Tuesday when data evidencing faster than expected growth in the first quarter saw Goldman Sachs, BNP Paribas and Citi raise their 2021 growth forecasts above 5%.

But the drought in Brazil is affecting inflation as it affects food prices, central bank head Roberto Campos Neto said on Wednesday, adding that climate change has been influencing central bank mandates and monetary policy.

Meanwhile, industrial production in Brazil fell in April for a third consecutive month, figures showed, a surprise drop showing a deeper than expected impact of the COVID-19 pandemic.

"(The fall in industrial production is) likely to be followed by a partial recovery last month," said William Jackson, chief EM economist at Capital Economics.

"That said, the latest surveys suggest that activity in the industrial sector hasn't picked up to the same extent as other parts of the economy," Jackson added.

Colombia's peso COP= rose 1% as oil rose, supported by an OPEC+ decision to stick to its plan to restore supply to the market gradually and by the slow pace of nuclear talks between Iran and the United States. O/R

In the world's second-largest copper producer Peru, socialist presidential candidate Pedro Castillo is taking aim at copper mining firms' coveted tax stability agreements that freeze tariffs, accusing mining firms of plundering Peru's wealth.

Mexico's peso MXN= rose 0.3%. Mexican President Andres Manuel Lopez Obrador's leftist National Regeneration Movement (MORENA) and its allies should comfortably defend their majority in the lower house of Congress in mid-term elections on June 6, an opinion poll showed on Wednesday.

A super majority by the ruling party would make it easier for it to pass less market-friendly reforms.

Among shares, beef producer Marfrig Global Foods MRFG3.SA jumped 4.6% a day after it asked antitrust watchdog CADE to approve its purchase of almost a quarter of Brazil's biggest poultry processor BRF's BRFS3.SA stock.

Mexico's Ipc index .MXX stayed at highs last seen in January 2018, while Colombia's COLCAP .COLCAP rose half a percent.

Elsewhere, South Africa's rand ZAR= erased session losses to hit a more than two-year high, while Russia's rouble RUB= was set to post its best session in three weeks, bolstered by the deputy economy minister's comments that the Russian economy will recover to pre-pandemic levels in the next few weeks, earlier than thought.

Key Latin American stock indexes and currencies:

Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1388.08

-0.2

MSCI LatAm .MILA00000PUS

2634.11

0.72

Brazil Bovespa .BVSP

128650.25

0.3

Mexico IPC .MXX

50864.45

0.28

Chile IPSA .SPIPSA

4401.63

0.13

Argentina MerVal .MERV

0.00

Colombia COLCAP .COLCAP

1229.76

0.54

Currencies

Latest

Daily % change

Brazil real BRBY

5.1236

0.43

Mexico peso MXN=D2

19.9260

0.19

Chile peso CLP=CL

721.7

0.86

Colombia peso COP=

3627.68

1.00

Peru sol PEN=PE

3.8598

0.06

Argentina peso (interbank) ARS=RASL

94.7700

-0.03

(Reporting by Susan Mathew in Bengaluru Editing by David Holmes)

((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.

Other Topics

World Markets

Latest Markets Videos

    Reuters

    Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

    Learn More