Home Argentina market EMERGING MARKETS – Latam FX slips after a sell-off, Peruvian soil rises

EMERGING MARKETS – Latam FX slips after a sell-off, Peruvian soil rises


* Brazil’s Guedes says government tax cuts allow prices not to adjust immediately * Truce over restart of Peru’s Las Bambas mine begins June 15 (Reuters) – Latin American currencies fell on Tuesday after starting the week down, hit by fears of rising inflation and slowing global growth, while Peruvian soil rose ahead of the restart of the Las Bambas copper mine. Emerging market assets along with other riskier assets were trading in a tight range for most of the day, with investors now pricing in a bigger-than-expected interest rate hike of three-quarters of a percentage point per month. the US Federal Reserve on Wednesday. In the face of rising global inflationary pressures and new COVID restrictions in China, investors have become increasingly risk averse. Latin currencies fell 0.2% on Tuesday, while stocks fell 0.6%. “If the Fed says we need to raise interest rates but we’re not going to do it too aggressively, that will improve all the other currencies that right now are losing against the dollar,” said Juan Perez. , director of trading. at Monex. The Brazilian real lost 0.5%, remaining near one-month lows. Services activity in Latin America’s biggest economy rose 0.2% in April from March, statistics agency IBGE said, below the 0.4% growth expected in a Reuters poll of economists. Brazil’s Economy Minister Paulo Guedes said government-backed tax cuts allowed prices to not adjust immediately, denying he had asked for prices to be frozen as the country faces persistent inflation and that President Jair Bolsonaro is seeking re-election. Credit Suisse analysts expect Brazil’s still-high inflation to spread across item categories for the remainder of 2022, namely food and fuel prices. Concerns about inflation and growing food shortages also affected sentiment in the developing world space. The Mexican peso lost 0.8%, while the Chilean peso lost 0.5%. Chilean company LATAM Airlines Group SA, Latin America’s largest airline group, fell 12.3% after asking a bankruptcy judge to approve $2.75 billion in new loans to finance the The company exited Chapter 11. Peruvian sol, however, outperformed its Latin American peers, rising to 3.75 to the dollar as it rebounded from one-month lows hit in the previous session. Investors were awaiting the start of a 30-day truce on Wednesday after a group of Peruvian indigenous communities agreed last week to temporarily lift a protest against MMG Ltd’s Las Bambas copper mine that forced the company to halt its operations for more than 50 days, the longest in the mine’s history. A Reuters poll of analysts showed Argentina’s monthly inflation rate is expected to hit 5.2% in May, still painfully high but slower than the previous two months. The peso fell 0.2%. Main stock indices and currencies in Latin America at 19:05 GMT: Stock indices Last daily change in % MSCI Emerging Markets 1016.92 0.05 MSCI LatAm 2130.99 -0.62 Brazil Bovespa 101767.94 -0.81 Mexico CPI 48557.46 0.23 Chile IPSA 5131.70 -0.01 Argentina MerVal 87253.85 – Colombia 0.44 Currencies Last daily change in % Brazilian real 5.1382 -0.53 Mexican peso 20.6209 -0.81 Chilean peso 867 -0.53 Colombian peso 3959.5 0.05 Peruvian sol 3.7486 -0.31 Argentine peso 122.5000 -0.16 (interbank) Argentine peso 221 -2.26 (Shreyashi parallel) Sanyal and Bansari Mayur Kamdar in Bengaluru Editing by Alistair Bell)