Latam FX steadies as Omicron fears ebb, Peru's sol hits five-week highs

(Updates prices)

By Shashank Nayar

Dec 28 (Reuters) - Most Latin American currencies steadied on Tuesday, supported by an easing of concerns about the Omicron variant with the Peruvian sol hitting five-week highs, while Brazilian stocks fell to a one-week low led by weakness in miner Vale.

MSCI's index of Latin American currencies .MILA00000CUS inched 0.3% higher, in a fifth consecutive session of gains.

Latam currencies are set to end December higher after dropping for three consecutive months. Strong commodity prices, waning Omicron worries and hawkish central bank decisions to curb rising inflation pressures have all helped emerging market currencies in the region.

Global equity markets climbed on Tuesday, boosted by another record-setting open on Wall Street as investors shrugged off concerns over Omicron-driven travel disruptions and store closures.

"The good news is that the global economy is on track to extend and entrench recovery; as re-opening of borders fires up tourism-related multipliers and scope for de-congestion of supply-chains greases industrial activity. But the recovery path is likely to be bumpy," analysts at Mizuho Bank wrote in a note.

The currency of oil-exporting Mexico MXN= gained 0.1%, tracking strong gains in crude oil prices, which hovered around the $80 per barrel mark. The peso is on track to be the best performing currency among its Latin American peers this month, up 3.7%, to be followed by the Peruvian sol PEN= .

Mexican stocks .MXX rose 0.6% to an all-time high in early trading before turning flat.

MSCI's index of Latam stocks .MILA00000PUS slipped 0.3%, primarily on weakness in Sao Paulo stocks .BVSP , down 0.7%.

Brazilian miner Vale VALE3.SA was the biggest drag on the index. A group representing two-thirds of bondholders in Brazilian miner Samarco, a joint venture between BHP Group BHP.AX and Vale, rejected a restructuring offer put forward by the company, though both sides are expected to offer fresh proposals.

Brazil's real BRBY , BRL= was flat after the jobless rate BRPNAD=ECI fell more than expected to 12.1% in the three months through October, statistics agency IBGE said.

Economy Ministry officials have forecast that a rebounding labor market will strengthen the economy next year, but market economists are trimming their 2022 growth outlooks because of sharp increases to interest rates in response to double-digit inflation.

Other Latin American currencies including the Chilean peso CLP= firmed, while the Colombian and the Argentine ARS= peso eased between 0.1% and 0.2%.

Chile's peso is on track to be the worst performing currency among its Latam peers this year, down 20.6% year to date and set to drop for the eighth consecutive month.

Key Latin American stock indexes and currencies at 1920 GMT:

Stock indexes


Daily %

change MSCI Emerging Markets


0.46 .MSCIEF



-0.29 .MILA00000PUS

Brazil Bovespa


-0.81 .BVSP

Mexico IPC


0 .MXX

Chile IPSA


-0.28 .SPIPSA

Argentina MerVal


-1.108 .MERV

Colombia COLCAP


-0.09 .COLCAP



Daily %

change Brazil real




Mexico peso


0.07 MXN=D2

Chile peso




Colombia peso COP=


-0.22 Peru sol




Argentina peso


-0.05 (interbank) ARS=RASL

Reporting by Shashank Nayar in Bengaluru; editing by Barbara Lewis and Richard Chang

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.