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Bonds News

EMERGING MARKETS-Brazil's real leads Latam FX losses on virus fears

    * Chilean peso the sole gainer
    * Latam stocks also retreat

    By Ambar Warrick
    Jan 5 (Reuters) - Brazil's real led losses across Latin
American currencies on Tuesday as a mix of weak economic data
and coronavirus fears weighed and most other units weakened as a
risk rally petered out.
    The real sank 1.2% after dropping nearly 2% on
Monday. The country posted a negative trade balance in December.

    The UK variant of the coronavirus was confirmed in Sao Paulo
on Monday, while China's suspension of imports from a Brazilian
pork plant, over coronavirus issues, also raised concerns over
any disruptions to Brazil's agriculture exports.
 
    The country is among the worst hit by the coronavirus and is
racing to ramp up inoculations, playing catch up to neighboring
Chile and Argentina, where they are underway.
    Concerns over the pandemic and Brazil's fiscal health saw
the real underperform most emerging market currencies in 2020.
It has also marked a weak start to 2021.
    Chile's peso outperformed its peers for a second
session, rising 0.2% after the country's economic activity grew
in November for the first time since the start of the COVID-19
pandemic in the South American nation.
    Risk-linked assets, particularly those in Latin America, are
expected to recover this year on the back of loose monetary
policy, large stimulus measures and the eventual vaccination of
the populace.
    "Although the pandemic is weighing on the global economy at
the moment, vaccinations are picking up speed in many countries.
Fiscal and monetary policy are highly supportive, and financial
conditions are very loose. We therefore continue to expect
strong global growth in 2021, despite recent virus headlines,"
Mark Haefele, chief investment officer at UBS Global Wealth
Management wrote in a note.
    Currencies of oil exporters Mexico and Colombia
 fell in tandem with an earlier drop in oil prices.
    The Mexican government raised $3 billion in a 50-year note
offering that was more than three times oversubscribed. The move
is part of a bid to increase government finances after a spike
in spending due to the pandemic.
    Latin American stocks also retreated, tracking a decline on
Wall Street. Brazilian stocks fell 1.5%, while Chilean
stocks lost 0.2%.
    Key Latin American stock indexes and currencies:
    
                              Latest      Daily % change
 MSCI Emerging Markets         1308.57                 0.32
                                        
 MSCI LatAm                    2392.28                -2.75
                                        
 Brazil Bovespa              117080.74                -1.49
                                        
 Mexico IPC                          -                    -
                                        
 Chile IPSA                    4250.88                -0.15
                                        
 Argentina MerVal                    -                    -
                                        
 Colombia COLCAP               1418.01                    - Currencies             Latest      Daily % change
 Brazil real                    5.3351                -1.23
                                        
 Mexico peso                   20.0060                -0.26
                                        
 Chile peso                      702.8                 0.16
                                        
 Colombia peso                 3466.04                -0.53
 Peru sol                        3.628                 0.00
                                        
 Argentina peso                84.7900                -0.11
 (interbank)                            
                                        
 
 (Reporting by Ambar Warrick in Bengaluru; editing by Barbara
Lewis)
  
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