Home Argentina market EMERGING MARKETS-Brazil real leaps above 2%, Colombian peso drops to near 21-month low

EMERGING MARKETS-Brazil real leaps above 2%, Colombian peso drops to near 21-month low

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Band Susan Mathew

December 30 (Reuters)The real j from Brazilumpé 2.2% Thursday, last trading day of the year leading a Latin American currency index above one-month highs, while the Colombian peso fell amid expectations of spike in inflation.

The truth BRBY is set to earn around 0.8% this month, but will end 7.4% lower for year – its fifth consecutive year in the red, but faring better than most of its regional peers with the exception of the Mexican peso MXN =, which is down from 3.2%.

After gaining as much as 6% earlier in the year, the real stumbled, despite an aggressive round of central bank tightening as investors feared it would stifle growth, and as fiscal concerns increased in the past. amidst the populist policies of President Jair Bolsonaro ahead of next year’s elections. .

Brazil’s budget spending cap has been removed to finance stimulus programs. This saw the country post a larger than expected primary surplus in November, according to data on Thursday.

“Brazil’s economy is in a vicious cycle: low economic growth increases political pressure to increase spending, resulting in higher inflation … depreciation of the exchange rate and lower economic growth,” said Credit Suisse analysts pointed out in a note this month.

Colombian peso COP = fell 0.8%, down for the fourth session in a row, and hit an almost 21-month low at 4,065.41 against the dollar as forecasts from a Reuters poll showed inflationary pressures intensifying in part due to an increase in the minimum wage by the government, leading to expectations of more aggressive rate hikes.

MSCI Emerging Currency Index .MIEM00000CUSgained 1.1% to exceed one-month highs, as it is Down about 2.seven% this year.

The acceleration of monetary tightening in the United States has been pointed out as a risk factor for emerging markets, but most market experts said economies might be better prepared to deal with it.

Aamong other currencies, Chilean CLP =and Argentine pesos ARS = and Peruvian soil PEN = a little lower, while the Mexican peso MXN = won, following the strength of crude oil prices.

MSCI Latin American Equity Index .MILA00000PUS exceeded 2% with shares in Sao Paulo .BVSP and Chilean stocks .SPIPSA leading earnings.

Brazilian insurer SulAmerica SA SULA11.SA jumped 6% on a deal to acquire 100% of Sompo Saude, a subsidiary of Japan’s Sompo Holdings Inc 8630.T in Brazil.

Main stock market indices and Latin American currencies at 1930 GMT:

Stock market indices

Last

% daily change

MSCI Emerging Markets .MSCIEF

1222.72

0.39

MSCI Latin America .MILA00000PUS

2132.42

1.98

Brazil Bovespa .BVSP

105129.49

0.98

Mexico CPI .MXX

53113.96

0.69

Chile IPSA .SPIPSA

4300.12

1.17

Argentina MerVal .MERV

84216.82

0.25

Colombia COLCAP .COLCAP

1411.70

-0.29

Currencies

Last

% daily change

Real brazil BRBY

5.5723

2.14

mexican peso MXN = D2

20.4937

0.32

Chilean peso CLP = CL

851.5

-0.39

Colombian peso COP =

4065.41

-0.76

Peruvian soil PEN = PE

3.9769

-0.30

Argentine peso (interbank) ARS = RASL

102.7300

-0.04

BRL vs. Latam vs. EMhttps: //tmsnrt.rs/3qArb6R

EM Currency Volatility https://tmsnrt.rs/3HoOk32

(Reporting by Susan Mathew and Shashank Nayar in Bangalore; Editing by Nick Macfie and Chizu Nomiyama)

(([email protected]; + 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.