EMERGING MARKETS-Peru's sol hits new lows, Mexican peso up for fourth week running

  • 4/23/2021
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* Socialism jitters hit sol * Brazil"s real best weekly performer (Updates prices) By Ambar Warrick and Susan Mathew April 23 (Reuters) - The Mexican and Colombian pesos rose on Friday as oil prices rose, while Peru"s sol hit all-time lows and marked its worst week ever on concerns over a likely socialist presidency. Peru"s sol fell 0.8%, taking losses this week to 4%. The currency has lost for the past six sessions, as a series of polls showed socialist presidential front-runner Pedro Castillo keeping his lead over right-wing rival Keiko Fujimori. Castillo on Thursday sought assuage market fears, assuring he would not nationalize companies and would honor the rule of law. Mexico"s peso climbed about 0.6%, hovering around three month highs, while Colombia"s peso firmed 0.2%, as crude prices rose on hope of a global economic recovery fuelling demand. Mexico"s currency was set for a fourth straight week of gains, after higher-than-expected inflation data this week suggested that the central bank would keep rates on hold for longer. "With the U.S. economy quite far along on the re-opening side, a lot may already be in the price. We expect a catch up on reopening outside of the U.S., which should be EMFX positive," Citi analysts wrote in a note. "While a tapering announcement remains a risk, the timing is unclear. We are tactically short USD in Latam and to a lesser extent more positive on duration." Rating agencies Fitch and S&P on Thursday warned of Colombia"s public finances, saying recovery was dependent on a rise in income, whether via a proposed new tax law or by improving collection of current taxes. Brazil"s real fell 0.7% on Friday, but was the best weekly performer across the region, up about 1.7%, as a revised and delayed 2021 federal budget was signed into law, improving sentiment. The passage of the budget, President Jair Bolsonaro"s pledge to double funding for environmental enforcement efforts, and the cooling of U.S. Treasury yields have supported the real currency in recent days, said analysts at Genial Investimentos in a note. But Latam"s largest economy has been hit the hardest in the region by the pandemic, with investors on edge over strained government finances. Key Latin American stock indexes and currencies: Stock indexes Latest Daily % change MSCI Emerging Markets 1353.93 0.93 MSCI LatAm 2419.13 0.74 Brazil Bovespa 120309.01 0.79 Mexico IPC 49180.42 0.18 Chile IPSA 4841.84 -0.05 Argentina MerVal 47366.37 0.517 Colombia COLCAP 1287.69 -0.65 Currencies Latest Daily % change Brazil real 5.4910 -0.66 Mexico peso 19.8287 0.43 Chile peso 711.7 -0.77 Colombia peso 3626.56 0.20 Peru sol 3.787 -0.85 Argentina peso 93.1200 -0.04 (interbank) (Reporting by Ambar Warrick and Susan Mathew in Bengaluru and Luana Maria Benedito in Sao Paulo; Editing by Kirsten Donovan and Chizu Nomiyama)

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