Softer dollar, firmer commodities lift Latam FX



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Producer prices in Brazil fall 3.11% in August

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J.P. Morgan raises Mexican economic growth forecast

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MMG to invest $2 bln at its Peruvian Las Bambas mine

By Bansari Mayur Kamdar

Sept 28 (Reuters) - Currencies in commodity-heavy Latin American countries ticked up on Wednesday, outperforming their emerging market peers, as crude and metal prices firmed and the U.S. dollar slipped from a 20-year peak.

Latin American currencies .MILA000000CUS gained 0.1% as the dollar index =USD , which measures the greenback against a group of major currencies, eased after earlier hitting a fresh 20-year high.

The Brazilian real BRBY BRL= was up 0.5% against the dollar. Data showed Brazil’s producer price index (PPI) fell 3.11% in August, down from 1.13% in the previous month.

The real has advanced nearly 4.2% so far this year despite ongoing volatility as Brazil nears presidential elections on Sunday.

Former Brazilian President Luiz Inacio Lula da Silva has widened his lead over incumbent Jair Bolsonaro to 13 percentage points, a Genial/Quaest poll showed.

"Markets seem to be pricing in a Lula victory already," said Wilson Ferrarezi, economist at TS Lombard.

"The former president has been reinforcing a centrist message to markets, making alliances with market-friendly names and signaling that in his eventual third term in office he will adopt a market-friendly approach on policy," Ferrarezi said.

Brazil's Bovespa index .BVSP climbed 0.2%, while the broader Latam equity index .MILA00000PUS rose 0.3%.

Argentina's Merval index .MERV rose 0.7%. Moody's affirmed Argentina's Ca ratings, adding it "balances Argentina's limited market access, weak governance, and history of recurrent debt restructurings with recent efforts to marshal fiscal and monetary measures to start addressing underlying macroeconomic imbalances in the context of the IMF program that was approved earlier this year."

Crude prices rose on fears of production cuts caused by Hurricane Ian, boosting the currencies of oil exporters Mexico MXN= and Colombia COP= by 0.4% and 1.7% respectively.

J.P. Morgan analysts raised their economic growth forecast for Mexico's third-quarter gross domestic product (GDP), as well as for 2022.

Top copper producer Chile's peso CLP= gained 1.6%, while the Peruvian sol PEN= edged 0.4% higher as copper prices firmed.

Chinese miner MMG Ltd expects to invest $2 billion in the next five years to expand its Las Bambas copper mine in Peru and is eyeing potential acquisitions to further increase production, an executive said on Tuesday.

Elsewhere, Lebanon's finance minister told Reuters the country plans to slash its official exchange rate from the end of October, replacing the 1,507-per-dollar rate adopted 25 years ago with a rate of 15,000 in a step toward unifying numerous exchange rates.

Key Latin American stock indexes and currencies at 14:45 GMT: Stock indexes

Latest

Daily % change MSCI Emerging Markets

876.86

-1.69 .MSCIEF

MSCI LatAm

2050.44

0.26 .MILA00000PUS

Brazil Bovespa

108624.94

0.23 .BVSP

Mexico IPC

45028.84

0.05 .MXX

Chile IPSA

5140.64

-0.77 .SPIPSA

Argentina MerVal

136152.11

0.501 .MERV

Colombia COLCAP

1120.62

-0.28 .COLCAP

Currencies

Latest

Daily % change Brazil real

5.3472

0.55 BRBY

Mexico peso

20.2960

0.31 MXN=D2

Chile peso

970.5

1.31 CLP=CL

Colombia peso COP=

4476.13

1.61 Peru sol

3.9447

-0.24 PEN=PE

Argentina peso

146.8400

-0.18 (interbank) ARS=RASL

Argentina peso

287

1.05 (parallel) ARSB=


Reporting by Bansari Mayur Kamdar in Bengaluru; editing by Jonathan Oatis

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