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Views Article – Sharenet Wealth

Forex, News

Latam assets steady after sharp sell-off

Aug 6 (Reuters) – Latin American assets staged a partial recovery on Tuesday after a global sell-off driven by a symbolic fall in the value of China’s officially-controlled currency eased. Beijing stepped in to keep the yuan in control after its drop past a sacrosanct 7 to the dollar mark roiled financial markets on Monday with Washington calling its arch trade rival a currency manipulator. The intervention by the Chinese central bank helped emerging market currencies move higher and away from their 2019-lows. The White House said while it ‘could not tolerate’ the depreciation of the yuan, U.S. President Donald Trump was willing to continue trade talks with China and the Trump administration still plans to host a Chinese delegation for further talks in September. Goldman Sachs said it did not expect a trade deal between the two economic powers to be struck before the November 2020 U.S. presidential election. Brazil’s real moved 0.6% higher, on track to break a six-day losing streak with the central bank saying it saw gross domestic product staying stable or growing only slightly in the second quarter. The central bank had kicked off an easing cycle last week with a sharper rate cut than most economists expected and after data showed manufacturing slowed in Latin America’s largest economy in July. Other currencies in the region also gained with Mexico’s peso rising after four session of losses, while Colombian and Chilean pesos rose between 0.8% and 1.2%. MSCI’s index tracking Latin American stocks was on track to record their first gain in six sessions with Brazil’s Bovespa leading gains. Key Latin American stock indexes and currencies at 1420 GMT Stock indexes daily % change Latest MSCI Emerging Markets 973.27 0.03 MSCI LatAm 2684.58 0.8 Brazil Bovespa 101312.98 1.21 Mexico IPC 39757.50 0.65 Chile IPSA 4811.35 0.65 Argentina MerVal 40866.06 -0.017 Colombia IGBC 12383.80 1.08 Currencies daily % change Latest Brazil real 3.9616 0.57 Mexico peso 19.5779 0.16 Chile peso 714.8 0.80 Colombia peso 3424.51 0.83 Peru sol 3.373 0.39 Argentina peso 45.2700 0.49 (interbank) (Reporting by Agamoni Ghosh in Bengaluru Editing by Marguerita Choy)


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