Home Argentina economy EMERGING MARKETS – Currencies encourage slowing US inflation; The trend for real money in Brazil

EMERGING MARKETS – Currencies encourage slowing US inflation; The trend for real money in Brazil


    * Chile's peso jumps 1% as Escondida workers, BHP real temp
    * Brazil's real fall on economic data, political noise
    * Brazilian fuel distributors slip on likely rising

    By Susan Mathew
    Aug 11 (Reuters) - Most emerging market currencies rose on
Wednesday after data showed slower U.S. inflation, which
assuaged fears monetary stimulus would taper and sent the dollar
    Chile's peso jumped 1%, bolstered by the worker union
at the Escondida mine and its operator BHP reaching a
tentative deal for a new contract.
    This eased fears that the union will call a strike at the
world's biggest copper mine and reduce production of Chile's
largest export item. 
    South Africa's rand also jumped 1%, breaking a
five-day losing streak, after having lost up to 0.7% earlier in
the day. Oil exporter Russia's rouble pulled away from
two-week lows, while the currencies of Mexico and
Colombia firmed around 0.6% and 0.2% respectively.
    The dollar index retreated from a more than
four-month high after data showed U.S. inflation remained
historically high, but the increase slowed in July, in line with
Federal Reserve Chairman Jerome Powell's stance that rising
inflation is transitory.
    "While the market may view this as relief on the inflation
front, it's not likely to really shift the balance of risk for
the dollar beyond intra-day noise," strategists at TD Securities
    Peru's sol was little changed with investors awaiting
a meeting between the newly-elected administration and central
bank chief Julio Velarde regarding the likely extension of his
    Brazil's real bucked the trend, down 0.5%, as the
country's retail sales volumes fell 1.7% in June from May, data
showed, missing expectations for a rise. Political tensions,
better fundamentals and a hawkish central bank have helped the
currency to cut a chunk of its yearly losses. 
    Brazil's lower house of Congress voted down a plan by
far-right President Jair Bolsonaro to alter the country's voting
system on Tuesday.
    Bolsonaro's popularity has plunged with citizens
disillusioned by corruption charges against the leader and his
handling of the pandemic. 
    Shares in the country fell 0.9%, led by a near 9%
slide in health care company Qualicorp after its
second quarter profit fell 28.4%.
    Fuel distributors Petrobras Distribuidora,
Ultrapar Participacoes and Cosan slipped
between 1.6% and 3.8% after Bolsonaro signed a decree allowing
producers and importers of ethanol to directly sell the biofuel
to gas stations, increasing competition.
    Main stock indexes in most other Latam markets rose.  
    Key Latin American stock indexes and currencies at 1427 GMT:
   Stock indexes           Latest    Daily %
 MSCI Emerging Markets      1297.14    -0.25
 MSCI LatAm                 2489.06    -0.08
 Brazil Bovespa           121101.35     -0.9
 Mexico IPC                51320.08      0.4
 Chile IPSA                 4334.42    -0.25
 Argentina MerVal          68009.11   -0.021
 Colombia COLCAP            1244.42     0.66
      Currencies           Latest    Daily %
 Brazil real                 5.2195    -0.47
 Mexico peso                19.9648     0.59
 Chile peso                     772     0.70
 Colombia peso              3961.69     0.06
 Peru sol                    4.0722    -0.07
 Argentina peso             97.0500    -0.02
 (Reporting by Susan Mathew in Bengaluru; editing by Barbara


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