BRASILIA: Most Latin American currencies weakened on Wednesday after a plan to overhaul the US tax code advanced in Congress, fueling expectations of faster interest rate hikes in coming months.
The Republican-led US Senate approved sweeping tax legislation in the pre-dawn hours Wednesday, sending the package back to the House of Representatives for a final vote later in the day.
Tax cuts could lift US inflation and force the Federal Reserve to tighten policy at a faster-than-expected pace, driving capital away from high-yielding assets. Still, doubts over the bill's efficacy in boosting US growth kept a lid on the US dollar's gains.
"I expect there'll be pressure on the US fiscal accounts without a substantial improvement to economic growth," Wagner Investimentos director Jos? Faria Junior said.
Currencies from Mexico, Chile and Colombia
slipped between 0.1 percent and 0.3 percent, while the Brazilian real firmed 0.1 percent.
The Brazilian real firmed 0.1 percent, while the benchmark Bovespa stock index rose 0.8 percent.
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