BRASILIA: Latin American currencies advanced slightly on Tuesday as commodities prices rose for a third consecutive day, while a drop in banking shares dragged Brazilian stocks down.
The Peruvian sol and the Chilean peso strengthened the most among Latin American currencies, despite US inflation data suggesting an increasing likelihood of rate hikes by the Federal Reserve later this year.
"Oil is up sharply again, which weakened the dollar against emerging currencies after some positive data out of the US earlier today," said Jo?o Paulo de Gracia Correa, regional head of currency trading at the Brazilian brokerage SLW.
The Brazilian real gained only slightly in a volatile session after Finance Minister Henrique Meirelles announced new appointments for the economic team under the interim administration of Michel Temer as President.
Itau Unibanco's chief economist Ilan Goldfajn will replace Alexandre Tombini as central bank chief. Economists said his nomination signals a bank less vulnerable to political intervention and that could cut interest rates in the second half of this year as inflation eases.
Brazil's benchmark Bovespa stock index fell more than 1 percent, dragged down by financial shares such as those of state-run lender Banco do Brasil SA, which fell more than 3 percent. Meirelles said a new chief executive for Banco do Brasil will be announced in coming days.
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