EMERGING MARKETS-Chilean peso outshines Latam peers as copper prices gain ground

* Copper prices up as China reopening bets outweigh COVID spike * Brazil’s federal tax revenue up 3.25% in November * Peru president names Alberto Otarola as prime minister * Brazil reinsurer IRB jumps on making a net profit in October * Argentina’s economic activity up 4.5% in October (Updates prices, details; adds comment, chart) By Shreyashi Sanyal and Bansari Mayur Kamdar Dec 21 (Reuters) – Chile’s peso rose the most among major Latin American currencies on Wednesday, as copper prices regained their footing on hopes that top consumer China’s Easing of COVID-19 policies will raise demand, while Peru’s sol edged up after a partial cabinet reshuffle. The peso gained 1.8% against the dollar, tracking its best one-day percentage gain in two weeks as prices of the red metal moved higher, shrugging off worries that a recent surge in coronavirus infections in China was reducing consumption in the short term. Chile, which is the world’s largest producer of copper, relies heavily on demand from China, whose zero-COVID policy disrupted economic activity and pulled the industrial metal from a record high. The Chilean currency is on track for its second straight yearly decline, down more than 2%. “China’s announcement of measures to lower financial costs for businesses adds to the idea that 2023 will be a major recovery year for trade and overcoming the supply-chain woes that have aided global inflation,” said Juan Perez, director of trading at Monex. Latin American stocks rose 0.6%, outpacing the broader emerging markets. Higher exposure to commodities have helped certain emerging markets more than others, with Latam stocks set to end the year flat against a near-23% plunge in the MSCI’s broader EM index . Mexico’s peso rose 0.7% tracking firm oil prices. The Colombian peso was subdued on Wednesday and is down 14.6% so far this year, underperforming its regional peers. In Peru, President Dina Boluarte named lawyer Alberto Otarola as the new prime minister as part of a reshuffling of her cabinet. The sol rose 0.1%, while stocks index in Lima was flat. Boluarte was vice president until she replaced then-President Pedro Castillo earlier this month, who was removed from office and then detained after illegally trying to dissolve Congress. Peru on Tuesday gave Congress the provisional green light to bring forward a general election to the end of 2023, amid deadly protests over the impeachment of Castillo. “The approval is positive in the sense that it caters to growing pressures from the population and allows time for potential political reform changes that could limit the common stalemate between congress and executive branches,” Citi strategists wrote in a client note. Brazil’s real edged up against a firm dollar. Data showed the country’s federal tax revenue totaled 172.038 billion reais ($33.29 billion) in November, a 3.25% growth in real terms over the same month last year. Sao Paulo stocks rose 0.5%, with a 27.2% jump in Brazilian reinsurer IRB Brasil Resegoros SA leading gains after it posted a monthly profit in October. Argentina’s economic activity expanded 4.5% in October from a year earlier, the country’s official statistics agency said, in line with a recent Reuters poll. Elsewhere in emerging markets, the Czech crown edged 0.1% up against the euro after the country’s National Bank (CNB) held interest rates steady as expected amid signs of peaking inflation. Key Latin American stock indexes and currencies at 1920 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 953.51 0.26 MSCI LatAm 2143.37 0.59 Brazil Bovespa 107495.90 0.59 Mexico IPC 50445.26 0.61 Chile IPSA 5270.29 -0.33 Argentina MerVal 180065.64 4.485 Colombia COLCAP 1241.37 1.12 Currencies Latest Daily % change Brazil real 5.1969 0.12 Mexico peso 19.6410 0.52 Chile peso 870.4 1.73 Colombia peso 4762.82 -0.02 Peru sol 3.7996 0.08 Argentina peso (interbank) 174.2600 -0.19 Argentina peso (parallel) 321 Banjar 1.56; editing by Jonathan Oatis and Alex Richardson)

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