Latin American currencies firmed marginally in cautious trade on Monday, with Mexico's peso notching a near three-month peak as investors waited to see the impact a vote in the British parliament on Brexit would have on sterling and the dollar.
Markets in Latin America broadly made back ground lost early in the day following unexpectedly soft trade data from China, the destination for a significant amount of the continent's resources exports.
"We got off to a pretty poor start in terms of risk aversion which was triggered by those Chinese data numbers which highlighted the impact the trade war is having," said Christian Lawrence, a senior market strategist with Rabobank.
Tuesday's vote on British Prime Minister Theresa May's Brexit divorce deal is likely to have steep currency implications.
"We've seen things pick up a little bit, but volumes have been very light, people are in 'wait-and-see' mood for tomorrow's Brexit vote," said Rabobank's Lawrence.
MSCI's index of Latin America's currencies edged up 0.1 percent while its index of the region's equities rose 0.6 percent, pushed higher by gains among Brazilian stocks.
Mexico's peso traded 0.7 percent firmer, at levels not seen since before then President-elect Andres Manuel Lopez Obrador's administration jolted investor sentiment by scrapping an already started airport project.
Trading volumes of Mexico's peso, however, were only about 80 percent of their average over the past week, Refinitiv Eikon data showed. Mexican stocks slipped 0.4 percent.
Brazil's real firmed 0.3 percent while the Bovespa stocks index tacked on 0.9 percent to end at a fresh record closing high, as most sectors gained.
The benchmark has risen about 7.5 percent this month, its best January to date since 2009, helped by optimism among investors in Latin America's top economy about reforms proposed by new President Jair Bolsonaro and hopes of improved US-China trade ties.
State-run sanitation firm Companhia de Saneamento Básico do Estado de São Paulo - or Sabesp - was among the index's top gainers on Monday, jumping 5.3 percent to a record closing peak as government officials discussed its privatization.
Chile's peso gained modestly against a weak dollar, weathering lower prices of main export copper on the soft data from China, the metal's top consumer.
Chilean stocks ticked up to clock an over three-month closing peak, helped by lithium miner Sociedad Quimica y Minera de Chile S.A.'s 0.6 percent rise.
Argentine stocks lost 0.3 percent and the Argentine peso softened about 0.2 percent. Argentina's central bank had bought $50 million in the market earlier in the day to soften the peso.
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