LatAm FX edges higher with focus on Brazil polls
SPY•Most Latin American currencies rose slightly as lower oil prices and strong Chinese growth data supported risk sentiment, while investors watched Brazil’s presidential runoff polls. The regional currency index gained 0.3%; the real was steady at 5.06 per dollar as polls showed Flavio Bolsonaro’s lead over Luiz Inacio Lula da Silva narrowing.
1. Currencies edge higher
MSCI’s index tracking Latin American currencies rose 0.3% on Monday. Colombia’s peso gained 0.5% to a one-month high of 3,152.08 per dollar, while Mexico’s and Chile’s pesos each advanced 0.2%. Lower oil prices were viewed as relief amid energy-cost inflation, interest rates and fiscal imbalances in the region.
2. Brazil polls in focus
Brazil’s real hovered at 5.06 per dollar as investors followed the presidential runoff, less than a week away. Two polls showed Senator Flavio Bolsonaro’s lead over President Luiz Inacio Lula da Silva narrowing. Brazilian assets had rallied after Bolsonaro’s strong showing in the first round earlier in the month.
3. Other market developments
Latin American stocks were marginally lower, with energy-focused shares declining. Petrobras fell 2.5%, YPF dropped 2% and US-listed shares of Ecopetrol lost 1%. Elsewhere, Hungary’s 2027 budget plan targets a deficit of 4.9% of GDP, and Indonesia’s stock exchange plans to exclude highly concentrated-ownership stocks from several indexes after an MSCI warning.
