SAO PAULO/MEXICO CITY: A strong dollar pressured most Latin American currencies on Friday, with Colombia’s peso leading losses after the country’s central bank cut interest rates to a historic low.
The bank trimmed the rate by 25 basis points to 1.75%. The market was split on whether the bank would pause after cutting the rate by a total of 225 basis points over the last six months, or continue the easing cycle.
The peso lost 1.6%, declining for the eighth session in nine, and pushing weekly losses to 4% - its worst in more than three months.
Other Latam currencies weakened as investors fled to the dollar at the end of a turbulent week marred by rising risks to the global economic recovery and political uncertainty tied to the Nov. 3 US presidential election.
Brazil’s real dropped 0.7%, as did Mexico’s peso weighed additionally by lower oil prices. On the week, the peso lost around 5.5% - its worst in nearly six months.
Buenos Aires’ Merval index lost as much as 1% before trading flat, but ended the week slightly higher.
Chile’s peso retreated, tracking a drop in the price of copper, the country’s top export.
Stocks in Chile and Mexico provided a bright spot, while those in Brazil and Colombia dropped.
Comments
Comments are closed for this article.