Latin American assets extend losses as dollar rises, higher yields weigh
ILF•Latin American stocks fell 0.8% and currencies dropped 0.7% as a stronger dollar and higher US Treasury yields pressured markets. Brazil widened its 2026 primary deficit forecast to 80.9 billion reais, while Mexico’s inflation rose more than expected in early September.
1. Regional markets fall
Most Latin American assets came under pressure as the dollar rose on expectations of further Federal Reserve rate hikes. The region’s equity index fell 0.8% and its currency index declined 0.7%, both near one-month lows. The 30-year US Treasury yield reached its highest level since 2004, while the dollar index rose 0.2% to a two-month high.
2. Mexico and Brazil updates
Mexico’s peso weakened 0.4% as inflation accelerated more than expected in the first half of September. A senior Mexican official said the fourth round of US trade talks was postponed until later in October. Brazil’s central bank projected inflation close to its 3% target at the policy horizon and trimmed its growth outlook; the government raised its 2026 primary deficit forecast to 80.9 billion reais.
