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Latam currencies slide as dollar attempts gains, Americanas sinks

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Latin American currencies joined

broader emerging market currencies in the red on Monday as the

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dollar edged up from seven-month lows, while Brazilian retailer

Americanas plummeted on the possibility of an $8 billion debt

charge.

Brazil’s real tripped 0.3% against the dollar,

while Mexico’s peso lost 0.2%, both looking to break

four-session winning streaks.

“We continue to expect that Brazil’s real and Mexico’s peso

will lag regional peers that have a stronger exposure to a China

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rebound, such as the Chilean peso and the Peruvian sol,” said FX

strategists at Morgan Stanley.

The sol extended declines to a third straight session

amid political turmoil in the world’s second-largest producer of

copper. A state of emergency was extended for another month in

the capital city of Lima and two southern regions where deadly

protests against the government have sparked the country’s worst

violence in 20 years.

Last week, some top cabinet members resigned amid protests

triggered by the ouster of leftist former President Pedro

Castillo last month.

Among stocks, Brazil’s Bovespa index slumped xx%, on

course for its biggest one-day fall in two weeks.

Trading volumes were thin across markets due to a holiday in

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U.S. markets.

Iron ore miner Vale was the biggest drag, sliding

3% as prices of the steel-making ingredient slipped on China

demand worries.

Retailer Americanas SA sank 35.9% after a court

warned the company could be liable to repay up to 40 billion

reais ($7.9 billion) in debt earlier than planned, if the

retailer is found in breach of covenant after reporting

“accounting inconsistencies.”

Planemaker Embraer SA jumped 2.9% after it said

it had secured a new firm order for 15 new E195-E2 aircraft from

an undisclosed customer.

Key Latin American stock indexes and currencies:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 1029.64 -0.02

MSCI LatAm 2257.01 -1.44

Brazil Bovespa 109104.73 -1.63

Mexico IPC 53480.46 -0.18

Chile IPSA 5130.96 -0.5

Argentina MerVal 244398.75 0.927

Colombia COLCAP 1336.61 -0.06

Currencies Latest Daily %

change

Brazil real 5.1229 -0.33

Mexico peso 18.8173 -0.34

Chile peso 819.6 0.77

Colombia peso 4684.56 0.00

Peru sol 3.828 -0.79

Argentina peso 182.1500 -0.48

(interbank)

(Reporting by Susan Mathew in Bengaluru, editing by Deepa

Babington)

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