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(Updates prices) By Shreyashi Sanyal and Susan Mathew July 27 (Reuters) – Mexico’s peso rose to a near six-week peak on Monday, with most other Latin American currencies gaining on the back of a weakening dollar on concerns about the U.S. economy. The peso firmed 1.4% against the dollar. Data on Monday showed Mexico posted a record trade surplus in June as business activity began recovering from months of lockdown, but exports remained well below 2019 levels. The dollar index hit an over two-year low due to the surging number of U.S. COVID-19 cases, expectations of a more accommodative policy stance from the Federal Reserve, and deteriorating U.S.-China relations. Brazil’s real rose 0.9% with a central bank survey showing the outlook for Brazil’s economy improved for the fourth week in a row. Economists now expect Latin America’s largest economy to shrink by 5.8% this year. “In Brazil, short-term news flow seems to be improving: macro data has been surprising positively, virus momentum is slowing and tax reform negotiations are underway,” said FX strategists at JP Morgan. The Colombian peso snapped a three-day losing streak, with local investors eyeing an interest rate decision. Analysts expect the central bank to cut by 25 basis points at a policy meeting on Friday. But the mood was still not entirely “risk-on,” as coronavirus cases spiked around the region. For the first time, cases in Latin America surpassed the combined infections in the United States and Canada, a Reuters tally showed on Sunday, amid a surge in Brazil, Mexico, Peru, Colombia and Argentina. The Argentine peso retreated after the government reaffirmed on Saturday that it would not budge from its latest proposal to restructure $65 billion in debt, but signaled it would be willing to negotiate on the fine print around the deal. Regional stock indexes tracked gains on Wall Street. Brazil’s Bovespa rose 1.8% on a materials and financials boost, while Mexico’s Ipc index hit a three-week high, with cement producer Cemex jumping 9%. The company reported a quarterly loss but said sales in the United States increased. Its Latam subsidiary reported a profit for the second quarter compared with a loss a year ago. Key Latin American stock indexes and currencies at 1934 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1073.47 1.23 MSCI LatAm 2116.70 2.75 Brazil Bovespa 104225.09 1.8 Mexico IPC 37714.55 0.96 Chile IPSA 4062.19 1.18 Argentina MerVal 49384.64 1.604 Colombia COLCAP 1177.68 0.32 Currencies Latest Daily % change Brazil real 5.1593 0.90 Mexico peso 22.0029 1.16 Chile peso 768.5 0.64 Colombia peso 3673.36 0.51 Peru sol 3.508 0.74 Argentina peso 72.0700 -0.24 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru Editing by Sonya Hepinstall)