20 Jul EMERGING MARKETS-Chile’s peso climbs on plans to ease lockdowns; Most other Latam FX weaken
Chile’s currency firmed against a steady dollar on Monday on the country’s plans to gradually relax lockdown restrictions, while Mexico’s peso extended declines to a third day on declining oil prices and rising number of COVID-19 cases there.
Chile’s peso CLP= rose as much as 0.6% after government officials presented the plan on Sunday as the infection rate of the novel coronavirus disease improved in some regions of the country. Chile has so far reported 330,000 confirmed cases and more than 8,500 deaths related to COVID-19.
In Mexico, deaths from the disease rose to 39,184, while the total number of cases stood at 344,224 as of Sunday.
The peso MXN= slipped for a third straight session as oil prices fell amid worries over the pace of the global spread of the pandemic. O/R
Brazil’s real BRL= gave up early gains to trade flat.
On Friday, Brazilian Treasury Secretary Roberto Funchal said the government is analyzing the possibility of allowing Brazilians to withdraw money from their pension funds early, with questions about the harm it could do to Brazilian Treasury bonds being a major concern.
Foreign exchange strategists at JP Morgan see Brazil’s real outperforming owing to better economic growth in China – a major destination for Latam commodity exports.
“There are some initial signals that China’s growth continues for a while longer, benefiting commodity prices and currencies,” they said.
“China’s commodity import volume also maintained strong momentum into June in the latest data. We think in this scenario Brazil’s real would outperform MXN.”
Stocks in Brazil .BVSP rose 0.3% to their highest in over four month, driven by gains in the communication sector. Telecom stocks TIM Participacoes TIMP3.SA and Telefonica Brasil VIVT4.SA rallied after they teamed up with Mexico’s America Movil AMXL.MX to make an offer for the mobile unit of bankrupt Brazilian carrier Oi Group OIBR4.SA.
Other regional stock market indices were flat to lower, tracking a choppy session on Wall Street. .N
Argentina’s peso ARS= continued its slide into record low territory. The country on Friday confirmed its highest daily coronavirus case load after easing restrictions.
Colombian markets were closed for a local holiday.
Key Latin American stock indexes and currencies at 1403 GMT:
Daily % change
MSCI Emerging Markets .MSCIEF
MSCI LatAm .MILA00000PUS
Brazil Bovespa .BVSP
Mexico IPC .MXX
Chile IPSA .SPIPSA
Argentina MerVal .MERV
Daily % change
Brazil real BRBY
Mexico peso MXN=D2
Chile peso CLP=CL
Peru sol PEN=PE
Argentina peso (interbank) ARS=RASL