Brazil's real at over 3-month high as commodities boost Latam FX

* Ukraine central bank hikes by 100 bps to 10%

* Turkey holds rates, analysts split on next move

* Commodity-linked FX cheers Chinese policy easing

By Susan Mathew and Ambar Warrick

Jan 20 (Reuters) - Brazil's real hit a more-than three-month high on Thursday, supported by strong iron ore prices, while most other Latin American currencies advanced as pressure from rising U.S. Treasury yields eased.

The real BRBY BRL= jumped 1.5% to its highest level to the dollar since early October, tracking gains in iron ore prices as major importer China eased monetary policy further to boost economic growth.

Brazilian central bank chief Campos Neto flagged concerns over rising inflation, and said the bank was ready to act if it saw discrepancies in currency markets, likely pointing towards more policy tightening.

Copper prices also rose on optimism over Chinese demand, pushing up currencies of major exporters Chile CLP= and Peru PEN= by 0.9% and 0.7%, respectively.

Peru's sol hit a near seven-month high as MMG's 1208.HK Las Bambas copper mine inked a deal with local residents to avoid future road blockades that could disrupt operations and hurt the country's key copper exports.

Mexico's peso MXN= rose 0.2%. Focus now turns to President Andres Manuel Lopez Obrador's plan to tighten state control over electricity generation, ahead of a visit by a top U.S. energy official.

Broader emerging market currencies rose as U.S. Treasury yields retreated from recent peaks. But sentiment towards risk-driven assets remained fragile, with interest rates in the developed world set to rise this year.

Thursday also saw central bank decisions from several emerging economies: China eased its policy further to spur economic growth, Indonesia, Malaysia and Turkey held their key rates steady, while Sri Lanka and Ukraine hiked.

Ukraine raised rates by 100 basis points to 10% to tackle persistently high inflation and the economic fallout from a standoff with Russia.

Ukraine and Russian dollar bonds RU000A0JXU22=TE XS1577952952=TE slipped as U.S. President Joe Biden predicted a move into Ukraine by Moscow and as the European Union and the United States readied sanctions to be imposed on Russia in case of an invasion.

The Russian rouble RUB fell 0.6% while Ukraine's hryvnia UAH= eased 0.1%.

U.S. economists were split on what Turkey's central bank would do next after pausing its easing cycle to hold rates at 14% on Thursday. JPMorgan expects it to stay on hold for the rest of 2022 but Goldman Sachs predicts a U-turn and a rate hike in the second quarter.

The lira TRY= , which was the worst performing currency in the world in 2021, rose 0.3%.

Key Latin American stock indexes and currencies:


Daily % change MSCI Emerging Markets


1.48 .MSCIEF



2 .MILA00000PUS

Brazil Bovespa


1.59 .BVSP

Mexico IPC


-0.03 .MXX

Chile IPSA


0.38 .SPIPSA

Argentina MerVal


2.412 .MERV

Colombia COLCAP


-1.48 .COLCAP



Daily % change Brazil real




Mexico peso


0.20 MXN=D2

Chile peso




Colombia peso COP=


0.49 Peru sol




Argentina peso


-0.06 (interbank) ARS=RASL

Reporting by Susan Mathew and Ambar Warrick in Bengaluru; Editing by Bernadette Baum, Kirsten Donovan

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.