Chile's peso hits 15-month low as inflation fears dent Latam FX

Chile's peso led losses among Latin American currencies on Friday after a bigger-than-expected jump in inflation, while concerns over a broader rise in consumer prices weighed on most other regional units.

Chile's peso slumped 1.2% to its weakest level since July 2020, after data showed that consumer price inflation surged well above central bank estimates in September.

Chile has been grappling with high inflation as a strong COVID vaccination campaign spurred a swift return to economic normality in the country. But the central bank has been far less hawkish than its regional peers.

Losses in copper prices also weighed on Chile's currency.

Emerging markets showed a mixed reaction to US non-farm payrolls coming in drastically below expectations, as analysts questioned whether it provided enough justification for the Fed to delay trimming its massive stimulus.

Latam FX dips as high treasury yields, Chinese concerns weigh

"The Fed began their extraordinary stimulus measures over a year and a half ago and they are anxious to begin removing that stimulus, which is why it would have taken an extremely bad jobs report in order to derail that," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

"This report was disappointing, without a doubt, but we don't believe it is bad enough to stop them."

Investors are anxious over any hawkish moves by the Fed, given that they would push up US lending rates and make emerging markets appear less attractive.

Brazil's real fell and was headed for weekly losses as data showed that consumer prices grew at their fastest pace for the month since 1994 due to higher fuel and electricity prices.

Surging inflation has pushed the central bank into hiking interest rates five times this year, with more hikes to come.

Peru's sol rose 0.2% in slim holiday trade as President Pedro Castillo confirmed the current President of the Central Bank Julio Velarde for another term.

The sol had surged more than 1% on Thursday as a cabinet reshuffle by Castillo was perceived positively by investors, in particular new prime minister Mirtha Vasquez.

Latin American stocks rose on Friday, but were still headed for weekly losses after a volatile week consisting of weak economic readings and concerns over Chinese debt.

Argentine markets were closed for a holiday.