Mexican stocks rose 1.7% and the peso strengthened about 1% as a Democratic sweep in US midterm elections weakened the dollar and boosted appetite for emerging-market assets. Latin American equities gained 1.9%, while the region’s currency index rose 0.4%.
Latin American stocks and currencies rose on Wednesday after Democrats won control of both chambers of Congress, weakening the dollar and lifting demand for riskier emerging-market assets. The dollar fell 0.3% against a basket of major currencies, and US Treasuries rallied.
Mexico’s benchmark stock index climbed 1.7%, reaching its highest level since March, while the peso strengthened about 1% against the dollar. Juan Perez of Monex said investors may expect the election result to limit tariff proposals; he said congressional approval is required for changes to the United States-Mexico-Canada Agreement.
Brazil’s central bank was due to announce its policy decision after five consecutive 25-basis-point rate cuts. A poll of foreign-exchange strategists showed a weaker outlook for Brazil’s real amid concerns about fiscal policy after President Luiz Inacio Lula da Silva’s re-election. Brazil’s Bovespa rose 1.1%, while the real gained 0.2%; Chile’s peso rose 1.2% and its stock index gained 1.7%.
