*
Brazil's industrial output up 0.1% in August after July
drop
*
Approval of Brazil's Lula slips ahead of local elections
*
Argentina budget cuts spark protests at universities
*
Latam FX up 0.6%, stocks add 0.8%
(Updated at 3:42 p.m. ET/ 1942 GMT)
By Shashwat Chauhan and Ankika Biswas
Oct 2 (Reuters) - Most Latin American currencies slipped
on Wednesday, as the dollar firmed after a better-than-expected
private payrolls data showed a stable labor market, adding to
hopes that the Federal Reserve might not opt for another
outsized interest rate cut.
The dollar index climbed to a three-week high
after data showed U.S.
private payrolls
increased more than expected in September, further evidence
that labor market conditions were not deteriorating.
"Like yesterday's job openings total, today's ADP
employment number surprised to the upside, suggesting the labor
market is bending but not breaking," said Chris Larkin, managing
director, trading and investing at E*TRADE from Morgan Stanley.
"But Friday's monthly jobs report will have the final
word on the current jobs picture, and more than likely, on
near-term market sentiment."
Chile's peso was the worst hit, down 0.8%, while
Peru's sol weakened 0.4%.
Brazil's real slipped 0.1% in choppy trading.
Ratings agency Moody's upgraded Brazil's long-term issuer and
senior unsecured bond ratings to Ba1 from Ba2, leaving the
economy just one step away from regaining investment grade.
Data showed Brazil's industrial production grew in line with
expectations in August, reversing some of the losses registered
in the previous month despite high interest rates.
Mexico's peso, meanwhile, rose for the third straight
day, firming almost 1% against the dollar a day after Claudia
Sheinbaum was sworn in as Mexico's first female president.
A poll showed Mexico's peso will recoup some losses in the
medium term if the new government holds back from pressing more
controversial changes like a judicial reform that has eroded
market sentiment in recent months.
Further, Mexican central bank deputy governor Jonathan Heath
said in an interview that the nation's benchmark interest rate
should stay at its current level for longer.
Oil producer Colombia's peso strengthened 0.7%, as
crude oil prices remained elevated on risking geopolitical risks
in the Middle East.
In latest developments, Israeli forces pushed into south
Lebanon in a campaign against the Hezbollah armed group, a day
after Iran fired missiles at Israel.
Israel's international bonds slipped across the board and
the country's default insurance costs rose to almost 12-year
highs, after another ratings downgrade and rising fears the
Middle East conflict will spread further.
MSCI's index for Latin American currencies
was last up 0.6%, while a gauge for stocks added
0.8%.
Argentina's public universities will hold a massive
demonstration on Wednesday, backed by unions and opposition
parties, to protest against sharp public spending cuts
implemented by President Javier Milei.
Elsewhere, Poland's central bank left interest rates
unchanged, as expected, saying inflation should return to its
target after the energy price shock fades.
HIGHLIGHTS:
** Brazil credit rating upgrade paves the way for reduced
risk premium, officials say
** Ghana inflation rises in September as food prices surge
** Approval of Brazil's Lula slips ahead of mid-term local
elections
Key Latin American stock indexes and currencies:
Stock indexes
Latest Daily % change
MSCI Emerging Markets 1186.47 1.18
MSCI LatAm 2251.72 0.82
Brazil Bovespa 133575.33 0.82
Mexico IPC 52216.36 -0.5
Chile IPSA 6391.8 -0.88
Argentina MerVal 1716498.29 -0.71
Colombia COLCAP 1297.67 -0.72
Currencies Latest Daily % change
Brazil real 5.4443 -0.14
Mexico peso 19.4144 0.97
Chile peso 911 -0.8
Colombia peso 4181.44 0.68
Peru sol 3.7197 -0.4
Argentina peso (interbank) 970.0 0.00
Argentina peso (parallel) 1,195.0 2.05
(Reporting by Ankika Biswas and Shashwat Chauhan in Bengaluru;
Editing by Emelia Sithole-Matarise and Deepa Babington)
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