All Things Newz

Latam currencies slide as China worries dent risk appetite

Article content

Brazil’s real and Mexico’s peso fell

against the dollar on Monday, tracking other emerging market

currencies as worries about China’s economic growth dented risk

appetite, while Hungary’s forint was set for its worst session

since May against the euro.

The forint’s 1.7% slide was triggered by S&P

lowering Hungary’s credit rating outlook to negative from


S&P said external risks, including potential cuts to

European Union funds and reduced gas flows, could weigh on

Advertisement 2

Article content

Hungary’s growth prospects, already pressured by surging

inflation and a fiscal adjustment to rein in the budget deficit.

The forint has slumped more than 7% so far this year, far

underperforming other central and eastern European currencies. A

broader basket of emerging market currencies is

down about 4%.

Global sentiment took a hit on Monday after weak retail

sales and factory activity in China raised worries about slowing

growth in the world’s second largest economy, prompting its

central bank to cut a key lending rate to stimulate demand.

This sent the safe-haven dollar rallying.

“The first impression from the latest set of activity data

for July is that there are few signs of a strong rebound in the

(Chinese) economy,” said Charlie Lay, FX and EM analyst at

Advertisement 3

Article content


“Consumer sentiment is likely to remain fragile given

uncertainties over future outbreaks and lockdowns. Furthermore,

the economy is still battling with the property correction and

weak investment in general.”

China is a major destination for commodity exports from

resource-rich Latin America.

Brazil’s real lost 0.5%, after three weeks of gains.

Investors seemed to look past data showing economic activity

rose more than expected in June, helped by a service sector

rebound following the impact of the COVID-19 pandemic.

The country’s central bank chief defended policymakers’

focus on 12-month inflation through March 2024, contributing to

signals that the bank may be done raising interest rates.

Advertisement 4

Article content

Brazil stocks edged 0.2% higher. Oil company

Petrobras rose 0.4% after saying it would lower

refinery gate gasoline prices by 4.9% from Tuesday, while Vale

dropped 2%.

The miner was fined about 86.3 million reais ($16.82

million) after the country’s comptroller general decided the

company did not present truthful information on the conditions

of its Brumadinho tailings dam prior to a 2019 disaster.

Mexico’s peso lost 0.1%, breaking a five-session

winning streak.

Most other Latin American markets were closed for local


Key Latin American stock indexes and currencies at 1900 GMT:

Stock indexes Latest Daily % change

MSCI Emerging Markets 1013.57 -0.32

MSCI LatAm 2258.89 -0.01

Brazil Bovespa 113086.81 0.29

Mexico IPC 48864.49 0.02

Chile IPSA 5394.91 1.3

Argentina MerVal 125979.57 2.145

Colombia COLCAP 1330.82 0.48

Currencies Latest Daily % change

Brazil real 5.0979 -0.49

Mexico peso 19.8743 -0.23

Chile peso 873.9 0.00

Colombia peso 4157.13 -0.02

Peru sol 3.8491 0.00

Argentina peso 134.5800 -0.23


Argentina peso 290 2.41


(Reporting by Susan Mathew in Bengaluru; Editing by Kirsten




Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Source link

Related posts

Saudis Say Oil Decisions Are for OPEC+ as Biden Leaves Kingdom

Facebook parent Meta makes first-ever bond offering

China’s Oil Majors Post Record Profits on Surging Fuel Prices