Latam FX mixed as investors weigh regional developments and US rate outlook
TLT•Latin American currencies were mixed, with Chile's peso falling 0.4% to a 19-month low, while regional investors weighed US rate expectations and economic data. Brazil retail sales rose 0.1% in September, against forecasts for a 0.3% decline.
1. Currencies diverge
Latin American currencies were mixed on Friday. Chile's peso weakened 0.4% against the dollar to its lowest level since April 2025, while the MSCI Latin American currency index was little changed and remained on course for a third straight weekly decline.
2. Rate and trade signals
Stronger-than-expected US inflation data reinforced expectations that the Federal Reserve could raise rates again. In Mexico, Treasury Secretary Scott Bessent said he expected the US to reach trade deals with Mexico and Canada, a day after President Donald Trump threatened to double tariffs on Mexico.
3. Regional developments
Brazil's retail sales rose 0.1% in September from the previous month, defying forecasts for a decline of 0.3%. Peru's central bank raised its benchmark rate by 25 basis points to 4.50%, while Mexico's central bank cut its rate by 25 basis points to 6.25% last week.
