Latam FX up against steady dollar; Upbeat economic data lifts Mexican peso

Mexico's peso rose on Tuesday after data showed industrial output rose in June in a sign of recovery following the coronavirus lockdown, while other Latin American currencies strengthened as the dollar held steady.

The peso gained 0.3% as a rebound in manufacturing and construction saw Mexican industrial output rise 17.9% in June from May.

But, "while production appears to have strengthened in July, further gains will probably be more muted," warned Capital Economics in a client note.

Mexico's coronavirus death toll passed 53,000 on Monday as the government struggles to balance the need to curb the pandemic with re-opening Mexico's battered economy. Early in June, the country's Deputy Health Minister had said that a toll of 60,000 would be a "very catastrophic scenario."

Brazil's real firmed as the dollar started to lose momentum as signs of an improving global market outlook saw investors betting on riskier currencies.

Minutes from Brazil's latest central bank meeting showed interest rates are close to as low as they can go without destabilizing financial markets, meaning any further reductions will likely be gradual and spaced out over time.

In Chile, after two days of losses that pushed its currency to one-month lows, the peso bounced 1.5% on Tuesday.

Among shares, major regional stocks indexes were mixed, tracking choppy session on Wall Street.

Mexican shares jumped 1% to scale two month highs. The index extended gains to a fifth straight session amid expectations of a 50 basis points cut in Mexico's key interest rate on Wednesday.

Brazil shares slipped on a materials drag. Lender Banco BTG Pactual slipped slightly as its second-quarter recurring net income fell 4.1% on higher operating expenses.

In Argentina, Economy Minister Martin Guzman said a new financing program with the International Monetary Fund is not likely until the beginning of next year.

The Peruvian sol traded flat. Unrest in the country grew, causing mining and oil production disruptions, amid demand for more economic aid and healthcare support during the pandemic as a second wave of COVID-19 infections hits the country.