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Argentina inflation cools in September
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Peru interest rate decision on tap
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Latam MSCI stocks index up 0.5%, FX slips 0.1%
(Updated at 1931 GMT)
By Johann M Cherian
Oct 10 (Reuters) - Peru's sol depreciated the most among
Latin American currencies on Thursday, with traders pricing in
an interest rate cut by the domestic central bank, while
Colombia's peso firmed, tracking higher crude prices.
Peru's sol dropped 1.3% and was on track to log its
biggest one-day decline since April. Traders are expecting the
local central bank to trim borrowing costs in the Andean nation
by 25 basis points to 5% later in the day.
On the flip side, the local equities index rose
more than 2%.
"Recent data are broadly supportive of further normalization
of the policy stance through a moderate move ... the inflation
backdrop showed incremental progress even relative to the benign
dynamics in recent months and inflation expectations continue to
soften, approaching the 2.0% target," said analysts at Goldman
Sachs.
Meanwhile, oil exporter Colombia's peso appreciated
0.8% to 4,199 to the dollar, tracking crude prices that jumped
over 3.5%, underpinned by a spike in fuel demand as a major
storm barreled in to Florida, and supply risks in the Middle
East.
More broadly, an index tracking currencies in the region
dipped 0.2% against a steady dollar. Markets
priced in upcoming interest rate cuts by the U.S. Federal
Reserve after data showed U.S. inflation was largely on a
downward trend, even though prices ticked up more-than-expected
in September.
Mexico's peso was flat, while the local equity index
gained more than 1%, after minutes from Bankxico's September
meeting showed the central bank expects easing inflation could
allow further reductions to its benchmark interest rate.
Brazil's real edged up 0.2% after hitting levels seen
two weeks ago in the previous session. Finance Minister Fernando
Haddad said taxing millionaires is one of the ways by which the
government is planning to undertake an income tax reform.
Concerns around fiscal stability in the region's largest
economy have weighed on the real recently.
Chile's peso firmed 0.4% after hitting a one-month
low in the previous session, tracking a rebound in copper
prices.
Currencies of major economies in the region have hit a rough
patch this week, and are on track for weekly declines as the
initial optimism around China's stimulus and the consequent
demand for commodities out of the resources-rich region fizzled
out.
MSCI's gauge for equities in the region
edged up 0.5% but was near one-month lows, with stocks in Brazil
and Colombia adding 0.2% and 0.7%,
respectively.
Elsewhere, Argentina's MerVal index rose more than
1.3% as data showed inflation stood at 3.5% in September on a
monthly basis, in line with a Reuters poll forecast and down
from 4.2% in August.
Key Latin American stock indexes and currencies:
Latin American market
prices from Reuters
Equities Latest Daily %
change
MSCI Emerging Markets 1156.36 0.7
MSCI LatAm 2194.8 0.53
Brazil Bovespa 130275.01 0.24
Mexico IPC 52367.99 0.96
Chile IPSA 6578.77 0.57
Argentina Merval 1795701.4 1.341
7
Colombia COLCAP 1310.98 0.74
Currencies Latest Daily %
change
Brazil real 5.5844 0.17
Mexico peso 19.4887 0.01
Chile peso 929.1 0.36
Colombia peso 4199.85 0.84
Peru sol 3.769 -1.32
Argentina peso 974.5 0.05
(interbank)
Argentina peso (parallel) 1160 1.29
(Reporting by Johann M Cherian in Bengaluru; Editing by
Philippa Fletcher and Matthew Lewis)
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