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Currencies, stocks up 0.2%
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US-Venezuela tensions loom over region
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Colombia's central bank holds rates steady
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Chilean equities lead gains
(Updates with afternoon trading)
By Niket Nishant and Twesha Dikshit
Dec 19 (Reuters) - Latin American assets edged higher on
Friday, led by gains in Chilean equities aided by copper prices,
while investors assessed geopolitical tensions and Colombia's
central bank kept rates steady as widely expected.
The Colombian peso rose 0.8% against the dollar. The
central ?bank voted to keep rates on hold at 9.25% at its last
meeting of the year, amid concerns over inflationary pressure.
The Colombian stock benchmark inched 0.6% ?higher, but
was on track for its biggest weekly loss since May. The Latin
American nation conducted a direct ?sale of local TES bonds worth
23 trillion pesos ($5.94 billion) with a foreign investor, the
finance ?ministry said.
Meanwhile, Colombia's government ?will present an economic
emergency decree on Friday aimed at raising about 16 trillion
pesos ($4.13 billion) to finance some of the spending needs in
the 2026 budget, ?the finance minister said.
Both the MSCI index tracking regional currencies
and ?the corresponding equities gauge
added 0.2% each.
The moves cap a volatile week for markets, which were
buffeted by a heavy slate of monetary policy decisions and
domestic political factors. Still, EM assets were ?set to end the
year having outperformed many domestic ?markets, aided by ?a
weaker dollar and diversification from the U.S.
"We believe a weaker USD, coupled with a renewed rate-cutting
cycle by the Fed, should serve as powerful tailwinds for EM
fixed income, supporting flows back into the ?asset class after
three years of record outflows," said Gorky Urquieta, co-head of
the emerging markets debt team at Neuberger Berman.
Tensions between the U.S. and Venezuela loom over the region.
Regional heavyweights Brazil and Mexico have called for
restraint, but their stance risks stoking Washington's ire.
POLITICS, ECONOMIC DATA DRIVE SENTIMENT
In Brazil, domestic political risks have come to the fore in
recent weeks. President Luiz Inacio Lula da Silva said on
Thursday he was "sensing" that interest rates could start to
come ?down soon, ?but central bank chief Gabriel Galipolo said
policymakers would stick to a data-dependent approach.
The real dipped 0.1% on Friday. The Bovespa index
gained 0.5% on Friday, after data showed that foreign
direct investment inflows beat ?expectations in November.
Chilean stocks jumped 1.1%, thanks in part to the price of
copper rallying to a near record high. The metal, widely used in
power, construction and manufacturing, is Chile's top export.
"Sentiment on Argentinian assets remains constructive, while
Chile continues to be the preferred Andean market. However,
copper prices remain the main risk for the region," analysts at
BofA Global Research wrote in a note.
Peru's central bank slightly raised its economic growth
forecasts for 2026, taking into account the likely impacts of
the country's upcoming presidential elections in ?April next
year. Equities gained 1%.
Meanwhile, Mexico's stock benchmark rose 0.5% while the
local peso was little unchanged. The central bank lowered
interest rates by 25 basis points on Thursday.
Key Latin American stock indexes and currencies at 1946 GMT:
Equities Latest Daily %
change
MSCI Emerging Markets 1368.61 0.77
MSCI LatAm 2670.45 0.23
Brazil Bovespa 158676.44 0.48
Mexico IPC 64113.85 0.48
Chile IPSA 10304.26 1.08
Argentina Merval 3149863.11 -0.42
Colombia COLCAP 2067.87 0.62
Currencies Latest Daily %
change
Brazil real 5.5287 -0.13
Mexico peso 17.9967 -0.02
Chile ?peso 910.13 0.03
Colombia peso 3824.12 0.8
Peru sol 3.3648 0.05
Argentina peso (interbank) 1449.0 0.14
Argentina peso (parallel) 1465.0 1.68
(Reporting by Twesha Dikshit and Niket Nishant in Bengaluru;
Editing by Mark Heinrich and Matthew Lewis)
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