SAO PAULO: Concerns about global growth and the euro zone weighed on Latin American currencies on Monday, although the Brazilian real remained little changed after a central bank intervention on Friday.
The Mexican peso dropped 0.3 percent to 12.819 per dollar as global growth concerns increased after the World Bank revised down its forecast for East Asian economies.
Investors were also cautious about Spain's financial health, even as euro zone finance ministers said the country did not need a bailout for now.
Despite Monday's drop, the Mexican peso remains some 12 percent stronger from a June low -- a recovery that central bank governor Agustin Carstens said should help limit inflation.
In Brazil, the real was little changed at 2.030 per dollar as investors refrained from making strong bets on the currency for fear of central bank intervention.
Policymakers last intervened in the foreign exchange market on Friday, forcing the real to weaken even as other Latin American currencies gained on better-than-expected US payrolls data.
"The currency market remains stuck here. Investors know the central bank will intervene if the real moves too much, either strengthening or weakening," said Luciano Rostagno, chief strategist with WestLB bank in Brazil.
Since early July, the real has been trading within a narrow range of 2.0-2.1 units per dollar -- a level policymakers consider beneficial both to exporters and to inflation prospects.
Comments
Comments are closed for this article.