Mexican peso breaks winning streak, other Latam FX fall as dollar gains ground

Latin American currencies weakened on Monday with Mexico's peso breaking a four-session winning streak, as the dollar gained ground amid China-US tensions and mixed trade data from Latam's major commodity exports destination, China.

A decline in oil prices on China demand uncertainty and as Saudi Arabia made steep monthly price cuts also weighed on currencies of crude exporters Colombia and Mexico, which fell around 0.1% each.

Investors shrugged off official figures showing Mexico's measure of spending on machinery, equipment and new construction posted its biggest monthly rise on record in June after plummeting earlier in the coronavirus pandemic.

Chile's peso slipped after data showed the value of shipments of copper fell 13.2% year-on-year in August to $2.761 billion, hit by a dip in production and low prices. Chile is the world's top world copper producer.

Brazil markets were closed for a local holiday. Volumes were muted as US markets were closed for the country's Labor Day holiday.

Among stocks, Chile's IPSA index rose 0.3%, while Colombia's COLCAP extended losses to a third straight session.

Global stock markets were pulled higher by upbeat moves in Europe, but news that Washington may impose sanctions on China's biggest chipmaker, SMIC, and data showing China's exports rose in August but imports fell kept sentiment fragile.

Data also showed China's iron ore imports fell 10.9% in August from a month earlier, easing from a record high.

In Argentina, the government said it successfully restructured over $40 billion of local-law foreign currency debt on Friday, on top of its recent $65 billion international bond revamp, which will help the country dig itself out of its ninth sovereign default.

The peso, however, fell to new lows.

A central bank survey showed Argentina's economy is likely to contract 12% in 2020 due to the effects of the COVID-19 pandemic, a slightly more positive outlook than a month earlier.