Mexican, Chilean pesos rise as other Latam currencies fall

Mexico's peso rose on Wednesday as the country's newly announced investment push was viewed as positive for its ailing economy and the Chilean peso gained ground after copper prices rose, bucking a trend among other Latin American currencies.

The peso jumped 1.1% against the dollar, as investors were optimistic after the government presented an infrastructure investment plan worth almost $14 billion (297 billion pesos) on Monday. The package, which is mostly privately financed, is the first concrete sign of a renewed readiness by corporate bosses to invest under President Andres Manuel Lopez Obrador.

"After the government had so far seemed rather tight-fisted, referring to the difficult public finances, it is now going to support the economic recovery with the implementation of infrastructure projects," said Elisabeth Andreae, FX and emerging markets analyst at Commerzbank.

"As far as the choice of the projects is concerned, government and the president seem intent on preventing a repetition of past mistakes and to regain lost investor confidence."

Mexico's currency has fared better than those of regional peers in recent months, in part due to the strong economic connection with the United States, its main trading partner, but the peso remains exposed to volatility leading up to the Nov. 3 US elections.

Chile's peso rose 0.5% after copper prices rose on expectations of improving economic growth and stronger demand for industrial metals.

The Chilean central bank data showed a trade balance of $886 million in September, boosted by an 8.3% surge in the value of copper exports.

In Brazil, the real fell after Economy Minister Paulo Guedes said the country has no plans to extend emergency aid payments to the poor or extend the government's pandemic-fighting 'war budget' into next year.

Fears about Brazil's public finances have heightened, with investors questioning whether President Jair Bolsonaro is committed to resuming fiscal tightening after a decision well into the pandemic to pump up spending to fight the disease.

Brazilian central bank president Roberto Campos Neto said economic recovery is only partial, with sectors most affected by social distancing still "depressed," and also repeated policymakers' intention not to reduce monetary stimulus.

Stocks on Wall Street traded higher, even as US President Donald Trump broke off negotiations with Democrats on more economic aid on Tuesday.

Trump's abrupt call to end stimulus talks also hit oil prices, along with a larger-than-expected rise in US crude inventories. Crude exporter Colombia's currency fell against the dollar.

Peru's sol strengthened ahead of the central bank's decision on interest rates, with analysts expecting rates to be held steady.