SAO PAULO: Latin American currencies rose on Wednesday as a good start to the US earnings season encouraged investors to take risk in emerging markets, although the Brazilian real was little changed on the perception that policymakers do not want a much stronger currency.
The Mexican peso climbed 0.5 percent to 12.7349 per US dollar, leading gains in the region, as US stocks rose after two days of declines.
The Chilean peso climbed a quarter of a percentage point, resuming a gaining trend that had been interrupted on Tuesday by comments from Finance Minister Felipe Larrain, who said the government and the central bank may come up with "coordinated action" to prevent the currency from gaining further.
"The market was calmer today after the finance minister's verbal intervention," said Carlos Martinez, head of the money desk of Vantrust Capital in Santiago. "The economic fundamentals and interest rate differentials suggest that the peso will continue to appreciate."
The Chilean peso has rallied more than 1 percent in the first few days of 2013, on top of gains of nearly 8.5 percent in 2012.
The Brazilian real ended practically stable at 2.0366 per dollar, right in the central bank's comfort zone.
Brazilian policymakers intervened heavily at the end of 2012 to strengthen the real beyond 2.05 per dollar. Still, investors believe that policymakers want the real to remain weaker than two per dollar to support industry.
"The real will likely remain around 2.03 per dollar, driven by dollar inflows but without any meaningful rallies," said Italo dos Santos, a currency specialist with Icap brokerage.
Center>Copyright Reuters, 2013
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