Chile's peso outperforms; Peru's sol drop over 1pc ahead of elections

Chile's peso outperformed Latin American peers on Monday as prices for the country's top export copper rose on supply concerns, while Peru's sol tumbled further into record low territory ahead of final round presidential elections on Saturday.

The Chilean peso rose 0.4% as a strike by a union of remote operations workers at BHP's Escondida and Spence copper mines in Chile disrupted supply.

On the month, however, the currency in on track to mark losses of about 1.5% with a crackdown in China in the past few weeks after the government's vow to stabilise commodity prices hit copper prices.

Peru's sol fell 1.1% to 3.85 per dollar in low volumes low owing to a market holiday in United States. Peru's two presidential candidates - right-wing Keiko Fujimori and socialist Pedro Castillo, are neck-and-neck in opinion polls.

The election could tilt the country, a relative safe haven for investors in Latin America, sharply to the left or see the Fujimori family return to power.

Eyes are also on mid-term elections in Mexico also on June 6 to see if President Andres Manuel Lopez Obrador party get super majority, an outcome that leave little opposition to carry out proposed reforms to the detriment of markets.

The Mexican peso rose 0.2%, on course for its third straight month of gains.

In Brazil, the real was down 0.1%. But the currency is up about 4.2% this month, one among best monthly performers in May.

Most Latin American currencies are set to mark gains for the month.

"We expect the cyclical (global economic) recovery momentum to persist in the second half of the year, albeit with some bouts of volatility as the (US Federal Reserve) prepares the market for the discussion over tapering bond purchases," said strategists at UBS.

Among stocks, gains in Brazil's Bovespa were led by iron ore miner Vale which tracked the steel-making ingredient's prices higher.