Brazil real up; Most Latam FX pressured by rising US bond yields

Most emerging market currencies pared gains and some Latam currencies turned negative as US Treasury yields rose on reports of a $6 trillion US budget for 2022.

Brazil's real bucked the trend to rise 0.4%, putting it on course to mark the biggest weekly gain among major Latam peers.

A survey on Thursday showed Brazilian industrial confidence rose in May, the first rise in five months. But separate data showed unemployment hit a historic high of 14.7% in the quarter to March.

"BRL poses an interesting risk-reward profile, but real yield levels remain relatively low for now," said FX strategists at TD Securities.

Chile's peso gave up gains of up to half a percent made on higher copper prices, to trade 0.4% lower. The currency had posted its best session in almost two weeks on Wednesday after the copper price was lifted by workers threatening to strike at the world's biggest copper mine, Escondida.

US Treasuries yields rose after the New York Times reported President Joe Biden will announce on Friday what analysts said could be the largest spending since World War 1.

Peru's sol stayed at all-time lows with all eyes on the final round of the presidential election race between two polarized candidates - the latest in a string of political risk events haunting investors in Latin America, a region struggling to keep up with its global peers despite a commodities boom.

Falling oil prices on the possible return of Iranian supply kept Mexico's peso at bay.

The dollar remained subdued against the backdrop of easing inflation fears keeping monetary policy accommodative, benefiting riskier currencies. But with talk of tapering rising, investors kept their eyes peeled for even the slightest mention of a shift in policy.

Stocks in Sao Paulo rose 0.2%, inching closer to January highs, while Chilean stocks climbed more than 1%.