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Brazil's central bank flags caution over US tariffs
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Colombian inflation reading expected
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Trump threatens higher tariffs on India
(Updates with afternoon levels)
By Purvi Agarwal, Sukriti Gupta and Ragini Mathur
Aug 5 (Reuters) -
Most Latin American currencies were flat to marginally
higher against the U.S. dollar on Tuesday, while regional stock
markets advanced on growing optimism that the U.S. Federal
Reserve may soon ease its monetary policy.
MSCI's Latam currencies gauge inched up
0.2% against a steady dollar.
Investors globally were also keen on U.S. President
Donald Trump's choice to fill an
open seat
on the Federal Reserve's Board of Governors that could
shape the stance of the world's most influential central bank.
In Latin America, Brazil's real edged 0.1% lower,
while stocks inched up 0.3% after the Brazilian central
bank
signaled caution
regarding the potential impact of new U.S. import tariffs
on specific sectors, and reaffirmed its policy stance aimed at
lowering inflation expectations.
Brazil faces one of the highest tariffs, at 50%, on certain
goods exported to the U.S.
However, analysts believe the country is unlikely to
suffer significant consequences from these steep levies, given
the limited share of its exports destined for the U.S. and the
range of exemptions the country received last week.
"In the case of Brazilian exports, agricultural produce
and some semi-manufactured products have increased since the
beginning of the year," said Alfredo Coutino, director for Latin
America at Moody's Analytics.
"So that means that even though they are targeted by
U.S. tariffs, it hasn't been significantly affected by the
tariff because now they are probably trying to send those
exports to different areas in the world."
Currencies of major copper exporters were mostly steady,
with Chile's peso remaining flat, while Peru's sol
edging up 0.3%.
Colombia's peso gained 0.2%. The Colombian central
bank revised its inflation projections higher for 2025 and 2026
on Monday, ahead of a consumer price index reading.
Mexico's peso appreciated 0.9% to touch a near
one-week high. The regional
central bank is expected
to deliver its verdict on monetary policy later this week,
with economists suggesting an interest rate cut of 25 basis
points.
Regional bourses also rose, with MSCI's index tracking
Latam stocks up 0.6%, putting it on course for a
second session of gains.
Mexican stocks advanced 0.9%, and shares in
Argentina added 2.6%.
Adding to the upbeat mood, UN's Economic Commission for
Latin America and the Caribbean (ECLAC) raised growth projection
for some of the Latam countries for year 2025.
Elsewhere, Russian President Vladimir Putin is
unlikely to yield to a sanctions ultimatum
from the U.S., which expires this Friday, sources close to
the Kremlin told Reuters.
The rouble closed 0.2% lower on the day.
Trump has threatened new sanctions and 100% tariffs on
countries buying Russian oil, mainly China and India, unless
Putin agrees to a ceasefire in Ukraine.
Trump said he would raise tariffs on Indian imports over the
next 24 hours, given the country's continued purchases of
Russian oil.
India's rupee was down 0.2% on the day, while
stocks slipped 0.3%, as markets closed before the latest
announcement.
The rupee is among the few currencies that have depreciated
against the dollar so far this year, compared to other emerging
market currencies that capitalized on the dollar's weakness in
2025.
Key Latin American stock indexes and currencies:
Latin American market
prices from Reuters
MSCI Emerging Markets 1246.8 0.79
MSCI LatAm 2256.87 0.60
Brazil Bovespa 133424.8 0.34
Mexico IPC 57044.34 0.7
Chile IPSA 8190.26 -0.24
Argentina Merval 2347175.4 2.6
Colombia COLCAP 1757.04 0.31
Brazil real 5.5048 -0.12
Mexico peso 18.7332 0.86
Chile peso 965.27 -0.01
Colombia peso 4090.1 0.19
Peru sol 3.554 0.29
Argentina peso 1338.5 1.36
(interbank)
Argentina peso (parallel) 1305 -0.8
(Reporting by Purvi Agarwal, Sukriti Gupta, Ragini Mathur and
Johann M Cherian in Bengaluru; Editing by Susan Fenton and
Mohammed Safi Shamsi)
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