SAO PAULO: Latin American currencies edged down on Thursday as weak manufacturing data in China, Europe, and the United States weighed on prospects for the region's exports.
Investors were particularly worried about data indicating the Chinese economy continues to lose momentum. China is the largest consumer of Latin American exports, and its economic slowdown could moderate dollar inflows to the region that are expected following newly announced US stimulus measures.
The Mexican peso slid 0.4 percent to 12.90 per dollar, also pressured by data showing US new claims for jobless benefits held near two-month highs in the latest week. The United States is Mexico's main trading partner.
Thursday marked the fourth consecutive session of losses for the peso, which rallied last week after the US Federal Reserve announced a third round of monetary stimulus.
The Brazilian real was little changed, as its volatility fell sharply after the central bank's recent interventions in the foreign exchange market.
Brazilian policymakers sold about $5.7 billion worth of reverse currency swaps last week and on Monday to offset the appreciation trend stoked by the US monetary stimulus. The bank has refrained from intervening in the market since then, but it is widely expected to act again if the real firms significantly.
"As the central bank intervenes, investors stop making bets because they know there will be market interference. Volatility falls, volumes dwindle and the number of market players decline as a result," said Ures Folchini, a treasury vice president at WestLB bank in Sao Paulo.
"Why would you invest in an asset if prices will not change? There are more interesting options such as interest-rate futures and stocks," he added.
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