Latin American currencies rose against a soft dollar on Wednesday as investors piled into risky emerging market assets after US President Donald Trump sounded upbeat about a trade deal with China, with the Mexican peso hitting a one-week high.
Trump said in an interview with Reuters that talks were taking place with Beijing officials by phone and he would not raise tariffs on Chinese imports until he was sure about a deal.
He also said he would intervene in the US Justice Department's case against a top executive with China's Huawei Technologies if it helped to close a trade deal with China.
The Brazilian real was on track to post its best day in two weeks ahead of the central bank's monetary policy meeting. Officials are expected to hold rates at record lows. “We expect the Brazilian Central Bank to keep the rate unchanged at 6.50 percent and think the BCB will stay on hold in 2019 unless there are signs of persistent effects on inflation," said Adam Cole, chief currency strategist at RBC Capital Markets in a note.
Brazil's benchmark Bovespa stock index jumped 1.4 percent in a broad-based rally led by energy stocks as oil prices jumped nearly 2 percent.
State-owned oil company Petroleo Brasileiro SA gained 1.7 percent after the company said it will raise refinery gasoline prices by 1.12 percent.
Vale, the world's biggest iron ore and nickel producer, rose 1.2 percent after the company said it had made a deal with Hankoe FIP investment fund to buy innovation company New Steel for $500 million.
Brazil's lower house agreed late Tuesday to extend a package of tax breaks that will lead to billions of dollars in savings for private companies but could eat into fiscal accounts in coming years.
Mexico's peso jumped 0.7 percent. The City Airport Trust said it will offer investors a better deal to repurchase bonds issued to finance a new airport that President Andres Manuel Lopez Obrador said he would scrap.
Mexican stock markets will be closed for a banking holiday.