Most Latin American currencies saw a slight decline in a holiday-affected session on Thursday, while the Mexican peso remained stable following minutes from its central bank’s recent meeting, hinting at potential rate cuts next year. The MSCI index tracking Latin American currencies fell by 0.2%, whereas the stock index advanced by 0.1%.
Mexico’s peso showed little change after the central bank’s minutes revealed discussions about possible interest rate cuts in the first quarter of 2024. Barclays analysts suggest that rate hikes are now unlikely, ruling out a December cut and anticipating a cut in Q1 2024, possibly in February or March. The local stock index gained 0.5%.
Earlier data indicated a slight increase in annual inflation in Mexico’s top economy to 0.63% in mid-November from 0.24% the previous month. Trading globally was anticipated to be subdued due to the Thanksgiving holiday in the U.S.
Peru’s Central Bank President, Julio Velarde, expressed concerns about a potential strong El Nino weather phenomenon impacting investments in the country, causing a 0.3% decline in the sol.
Brazil’s monetary policy director, Gabriel Galipolo, highlighted the resilience of variables with a strong transmission capacity for monetary policy amid international turbulence. The real remained flat, and Bovespa, the local stock index, climbed 0.3%, with Bradesco gaining 2.8% after electing Marcelo de Araujo Noronha as the new chief executive.
Argentina’s Merval index continued its upward trend, rising for the fourth consecutive session by 4.9%. Argentina raised taxes on U.S. dollar purchases to safeguard limited reserves ahead of President-elect Javier Milei’s assumption of office on Dec. 10. Reports suggested that Argentina’s central bank deliberated an interest rate hike at its directors’ meeting on Thursday.
The Colombian peso remained stable, while the Chilean peso declined by 0.4% against the dollar. In other emerging markets, Turkey’s lira retraced some gains, trading at 28.83 to the dollar after the local central bank unexpectedly raised its policy rate by 500 basis points to 40%. South Africa’s rand increased by 0.4% against the dollar after the central bank maintained its previous hawkish stance by leaving the main lending rate unchanged for the third consecutive meeting.
Key Latin American stock indexes and currencies:
- MSCI Emerging Markets: 986.99 (+0.34%)
- MSCI LatAm: 2463.66 (+0.14%)
- Brazil Bovespa: 126468.11 (+0.34%)
- Mexico IPC: 52929.57 (+0.49%)
- Chile IPSA: 5807.47 (+0.12%)
- Argentina MerVal: 879667.25 (+4.895%)
- Colombia COLCAP: 1123.63 (-0.74%)
Currencies:
- Brazil real: 4.9044 (-0.06%)
- Mexico peso: 17.1909 (-0.08%)
- Chile peso: 875.6 (-0.43%)
- Colombia peso: 4063.18 (+0.07%)
- Peru sol: 3.7338 (-0.27%)
- Argentina peso (interbank): 356.9500 (-0.13%)
- Argentina peso (parallel): 1025 (+5.37%)
