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Latin American FX snaps four-day winning streak; Peruvian sol rises


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Latin American currencies snapped

their four-day winning streak on Thursday against a firm dollar,

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but the Peruvian sol rallied against the greenback limiting

losses on the broader index.

The sol rose 0.6% against the greenback by 1512 GMT.

“The spike in sol is temporary and that’s only because some

of the level of violence that we’ve seen in Peru has started to

subside some,” said Juan Perez, director of trading at Monex.

“But, there is a lot of instability.”

The MSCI’s index for Latin American currencies

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slipped 0.2% as the dollar edged higher

after data showed the U.S. economy maintained a strong pace of

growth in the fourth quarter, even as momentum appears to have

slowed towards the end of the year.

Mexico’s peso fell 0.2% to 18.85, while the Brazilian

real eased 0.4%.

Brazil’s Bovespa index slipped 0.2%, with state-run

oil company Petrobras leading losses after the board

of directors approved President Luiz Inacio Lula da Silva’s pick

Jean Paul Prates as the firm’s next chief executive, TV channel

Globo News reported.

Americanas SA rose 9.6%, extending sharp gains

after the Brazilian retailer filed for Chapter 15 bankruptcy in

the United States on Wednesday.

A Rio de Janeiro court said Americanas owes a variety of

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creditors around $8 billion, providing the most detailed picture

yet of the exposure of banks and other groups to the company’s


On a positive note, foreign direct investment in Brazil

almost doubled in 2022 from the year before to its highest level

in 10 years, central bank data showed on Thursday, boosted by an

economy that surprised on the upside.

The Colombian peso rose 0.2% to 4511.56.

“While the currency is up again, it has to do with this idea

of policy divergences between 2022 and 2033 and also the hope

that there’s going to be global growth instead of a global

recession,” said Perez.

“But we we’re more cautious about that type of optimism.”

Chile’s peso edged 0.2% higher ahead of a rate

decision later in the day.

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Copper production in Chile, the world’s largest producer of

the red metal, will grow at a slower rate this decade than

previously hoped, a government report seen by Reuters showed.

Elsewhere in emerging markets, the South African rand

slid 0.4% after its central bank raised its main lending rate by

25 basis points, smaller than the 50 basis point increase

expected by the majority of economists polled by Reuters.

The Pakistani rupee fell 9.6% against the dollar, central

bank data showed, its biggest one-day drop in over two decades –

in a slump that may persuade the International Monetary Fund to

resume lending to the country.

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily % change

MSCI Emerging Markets 1052.25 1.06

MSCI LatAm 2346.40 -0.29

Brazil Bovespa 113864.01 -0.36

Mexico IPC 54879.62 0.02

Chile IPSA 5309.20 1

Argentina MerVal 260530.79 0.176

Colombia COLCAP 1308.38 0.55

Currencies Latest Daily % change

Brazil real 5.0887 -0.18

Mexico peso 18.8280 -0.28

Chile peso 800.3 0.32

Colombia peso 4531.2 -0.13

Peru sol 3.8675 0.43

Argentina peso (interbank) 185.3200 -0.15

Argentina peso (parallel) 379 1.06

(Reporting by Bansari Mayur Kamdar in Bengaluru

Editing by Raissa Kasolowsky)


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