EMERGING MARKETS-Brazilian real snaps three-day rally; eyes weekly gains

    * Brazil's real outperforms peers for the week
    * Chilean peso tracks sharpest weekly decline since August
    * Latam stocks index set to fall for the week

    By Shreyashi Sanyal
    Jan 15 (Reuters) - Brazil's real bucked a three-day winning
streak on Friday after data showed the first decline in retail
sales in seven months, although the currency is set to
outperform its Latin American peers for the week on improving
risk sentiment.   
    The real fell 1% against the dollar as
official figures showed Brazilian retail sales surprisingly fell
in November mainly driven by a sizeable fall in sales of food
    "The survey breakdown suggests that those components that
were performing well during the peak of the pandemic are now
contracting (food/beverages/supermarket or furniture/home
appliances), while others components that were more negatively
affected during that period keep recovering (apparel or cars),"
Citi strategists wrote in a note.
    Global risk sentiment showed signs of improving early in the
week, which has put the real on track to cap the week with gains
of 2.6%. 
    However, a travel ban imposed by Britain over a Brazilian
variant of the coronavirus hurt the mood on Friday.
    The MSCI's index for Latin American currencies
 was set to end the week higher, adding 1.3%. 
    Most risky assets have gained this week on anticipation of a
faster pace of global economic recovery as COVID-19 vaccines
start to roll out across the world. Sentiment was also boosted
by hopes of a fiscal boost from a $1.9 trillion U.S. stimulus
    The Mexican peso fell 0.6% on Friday, but was set for
its sharpest weekly gain in nearly one month on improving
economic data points.
    Among weekly decliners, Chile's peso led the descent
to tumble over 3% for the week. Chile's central bank announced
during the week a plan to purchase $12 billion over the next 15
months to replenish and expand foreign currency reserves.
    However, analysts expect substantial near-term weakness in
the peso, despite the intervention by Chile's central bank. The
currency dropped 1.2% in early trading. 
    Oil-exporter Colombia's peso fell 0.5% and was also
set to drop for the week tracking losses in crude prices.
    Equities across emerging markets fell on Friday, with the
MSCI's index for Latin American stocks set for
weekly declines of 1.6%. 
    Key Latin American stock indexes and currencies at 1455 GMT:
 Stock                             Latest   Daily %
   indexes                                  change
 MSCI Emerging Markets             1360.58  -0.74
 MSCI LatAm                        2500.64  -1.81
 Brazil Bovespa                    121392.  -1.69
 Mexico IPC                        45793.9  -0.6
 Chile IPSA                        4613.22  -0.6
 Argentina MerVal                  50679.7  -0.793
 Colombia COLCAP                   1457.08  -0.68
 Currencies                        Latest   Daily %
 Brazil real                       5.2654   -1.04
 Mexico peso                       19.8410  -0.68
 Chile peso                        735.1    -1.21
 Colombia peso                     3462.33  -0.52
 Peru sol                          3.6108   -0.06
 Argentina peso (interbank)        85.7300  -0.08
 Argentina peso (parallel)         155      2.58

 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Angus

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Translate »