Mexican peso tumbles again; Brazil stocks down as economic activity stagnates
Mexican peso renews slide, plunges 8% post election
Brazil's economic activity flat in April
Peru holds interest rate at 5.75%, in surprise move
By Shubham Batra
June 14 (Reuters) -The Mexican peso continued its slide on Friday as President-elect Claudia Sheinbaum remarked about electing judges and the Chilean peso dropped tracking a slump in copper prices, while Latin American stocks fell to an eight-month low.
Currencies across the region were in the red, driven by Mexico's peso MXN=D2 that fell 0.7% against the U.S. dollar as Sheinbaum on Thursday said that judges in the country should be elected, echoing her agreement with a controversial judicial reform proposed by outgoing President Andres Manuel Lopez Obrador.
The peso has so far slumped nearly 8% since a resounding election win early this month for the country's ruling party.
Mexican Deputy Finance Minister Gabriel Yorio said the government was continuing to reduce the country's 2025, 2026, and 2027 local debt with an operation to refinance some 181 billion pesos ($9.8 billion).
The country's MXX index .MXX fell 0.7%, logging its third straight day of losses.
Copper prices slipped, pressured by a firm dollar and rising inventories that highlighted a supply surplus, pushing Chile's peso PEN=PE down 1.3% against the greenback.
MSCI's gauge of Latin American stocks .MILA00000PUS was up 0.4%.
However, stocks in Brazil .BVSP were down 0.5% as economic activity in the region's biggest economy started the second quarter in stagnation, frustrating market expectations.
"Going forward, we expect activity to continue to benefit from significant fiscal stimulus, the generous increase in the minimum wage, the turnaround in the credit cycle and solid real household disposable income growth," Goldman Sachs Economic Research said in a note.
A Reuters poll of economists showed Brazil's central bank is set to pause on June 19 an easing cycle it started last year amid increased volatility in domestic financial markets and unanchored inflation expectations.
Argentina's Merval index .MERV slid 1.4%. The International Monetary Fund (IMF) board on Thursday cleared the way for Argentina to draw $800 million to help drive its economic recovery, saying the lending program was "firmly on track".
Meanwhile, the yield on Peru's 2-year local currency bond PE2YT=RR edged higher after its central bank on Thursday held the benchmark interest rate at 5.75%, bucking analysts' expectations of a 25-basis-point rate cut.
The Peruvian sol PEN= was up 0.3%.
Among individual stocks, Brazilian state-run oil company Petrobras PETR4.SA sank 1.0% after reports that it's chief executive officer Magda Chambriard, is expected to announce the firm's new management team later on Friday.
Key Latin American stock indexes and currencies at 1458 GMT:
Stock indexes | Latest | Daily % change | YTD % change |
MSCI Emerging Markets .MSCIEF | 1075.53 | 0 | 4.96 |
MSCI LatAm .MILA00000PUS | 2163.80 | 0.41 | -19.07 |
Brazil Bovespa .BVSP | 119037.30 | -0.44 | -11.29 |
Mexico IPC .MXX | 51967.87 | -0.59 | -9.44 |
Chile IPSA .SPIPSA | 6462.76 | -0.36 | 4.27 |
Argentina MerVal .MERV | 1582209.02 | -1.433 | 70.18 |
Colombia COLCAP .COLCAP | 1384.28 | -0.13 | 15.75 |
Currencies | Latest | Daily % change | YTD % change |
Brazil real BRBY | 5.3545 | 0.22 | -38.12 |
Mexico peso MXN=D2 | 18.4865 | -0.71 | 6.56 |
Chile peso CLP=CL | 928.6 | -1.26 | -33.81 |
Colombia peso COP= | 4167.82 | -0.61 | -28.45 |
Peru sol PEN= | 3.7682 | 0.30 | -14.10 |
Argentina peso (interbank) ARS=RASL | 902.0000 | 0.06 | -97.94 |
Argentina peso (parallel) ARSB= | 1235 | 0.81 | -98.44 |
Reporting by Shubham Batra in Bengaluru
Editing by Nick Zieminski
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