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EMERGING MARKETS-Chile's peso, Brazil's real propped up by commodity rally

05/10/2021 10:27
EMERGING MARKETS-Chile's peso, Brazil's real propped up by commodity rally

Copper prices surge to record highs

Higher oil prices support Mexican and Colombian pesos

Strong iron ore prices support real, Brazil stocks

MSCI EMFX index hits record high

By Shashank Nayar

- Most Latin American currencies and stocks gained on Monday, led by surging metal and oil prices on hopes of rising demand and a weaker dollar, while Brazil's real hovered near four-month highs after marking its strongest week this year.

Chile's peso CLP= was the top performer, rising 0.5% to its highest level since July 2019 as copper prices scaled record highs. MET/L

"The global boom in industrial metal prices – especially copper – is clearly a boon that generates about $4 billion in monthly exports for Chile," said Chris Turner, global head of markets at ING in a note.

Consumer prices in Chile are expected to nudge up 0.3% in May, according to a central bank poll of traders, while inflation in 12 months is expected to hit 3.05%. nAQN0454OW

Brazil's real BRBY, BRL= rose 0.3%, hovering near a four-month high as prices of iron ore - a top export - hit record highs. IRONORE/

With economic growth set to speed up in top iron ore buyer China, investors have been pricing in higher demand for the steel-making material.

Shares of Brazilian iron ore miners Vale VALE3.SA, Companhia Siderurgica Nacional CSNA3.SA and USIMINAS USIM5.SA rallied between 3.6% to 5%, pushing the Bovespa index .BVSP to a near four-month high.

The currencies of oil exporters Mexico and Colombia MXN=, COP= firmed 0.1% and 0.6% respectively, as oil prices jumped after a cyberattack forced the shutdown of major fuel pipelines in the United States and raised concerns about supply disruption. O/R

Other Latin American currencies like the Argentine peso ARS= slipped 0.1% while the Peruvian sol PEN= was unchanged.

Argentina's President Alberto Fernandez said he hoped a new, sustainable deal with the International Monetary Fund that would allow his heavily indebted country to develop can be reached soon. nS8N2IU03E

MSCI's index of emerging market currencies .MIEM00000CUS rose 0.4% to a record high, while stocks .MSCIEF rose to a 10-day high, with risk-driven assets set to benefit largely from loose monetary policy in the developed world.

The dollar held at 2-1/2 month lows on Monday as a weak U.S. employment report spurred investors to unwind growing long positions in the greenback, and pushing flows into high-yield, high-risk assets. USD/

Key Latin American stock indexes and currencies:


Stock indexes

Latest

Daily % change

MSCI Emerging Markets .MSCIEF

1354.13

0.41

MSCI LatAm .MILA00000PUS

2525.16

0.27

Brazil Bovespa .BVSP

122483.95

0.36

Mexico IPC .MXX

-

-

Chile IPSA .SPIPSA

4618.8

0

Argentina MerVal .MERV

NOT AVAILABLE

NOT AVAILABLE

Colombia COLCAP .COLCAP

1281.93

0




Currencies

Latest

Daily % change

Brazil real BRBY

5.2229

0.27

Mexico peso MXN=D2

19.88

0.1

Chile peso CLP=CL

691.6

0.53

Colombia peso COP=

3726.32

0.56

Peru sol PEN=PE

3.81

0

Argentina peso (interbank) ARS=RASL

93.92

-0.07



(Reporting by Shashank Nayar in Bengaluru; Editing by Alison Williams)

(([email protected]; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2256;))