SAO PAULO: Latin American currencies rallied on Thursday as investors bet US interest rates might not rise as fast or as high as feared next year, a more dovish view supporting an appetite for emerging market assets.
The Brazilian real jumped 1.7 percent, leading gains in the region. A central bank auction of $500 million in repurchase agreements, the sixth such sale this month, also boosted the currency.
The currencies of Mexico and Colombia followed suit, with gains of about 0.8 percent each, as investors were encouraged by minutes of the US Federal Reserve's latest monetary policy meeting.
The document, released on Wednesday when Latin American markets were mostly closed, crystallized the view that the Fed would start raising interest rates in December but also suggested the increases might come more slowly than some had thought.
"The Fed could pause more often when raising interest rates in 2016, in a very gradual way," analysts with Brazil brokerage Guide Investimentos wrote in a note to clients.
Comments
Comments are closed for this article.