MEXICO CITY: The Brazilian real slumped 1 percent to its weakest level in more than six weeks on Friday and Mexico's peso slid on fears of a withdrawal of US stimulus which has boosted demand for riskier emerging market assets.
Data showed the US manufacturing sector last month expanded at its fastest pace in 2-1/2 years, raising speculation that the Fed could move sooner than expected to wind down its bond-buying program.
The Brazilian real weakened 1.0 percent to 2.2567 per dollar. The cost of dollars in reais briefly rose above the currency pair's 100-day simple moving average, but pulled back to close just below the measure.
Friday's losses came on top of a near 2.0 percent drop on Thursday, marking the worst two-day slide since mid-August.
Traders expect the real to strengthen to the level of 2.2 per dollar in coming days, however, as foreign oil companies send dollars into the country to pay for a signing bonus related to a concession to explore an offshore oil area.
In an apparent attempt to cushion the real's losses, central bank monetary policy director Aledo Luis Menders stressed that the bank's current intervention program in foreign exchange markets has no set end date.
The Mexican peso slipped 0.33 percent to 13.0650 per dollar, its weakest level in three weeks, also hurt by data showing the country's factories remained stagnant in October despite recent interest rate cuts by the central bank.
Comments
Comments are closed for this article.