Mexican peso rises, Latam FX ends week in losses

Mexican peso outperformed its Latin American peers on Friday, on President Andres Manuel Lopez Obrador plans of injecting cash into the economy in May, amid hopes that the United States would emerge from a coronavirus lockdown in the near term.

The currency of Latin America's second biggest economy jumped 1.5% against the dollar, as Obrador vowed to inject around $2.5 billion to mitigate the effects of the coronavirus pandemic.

Mexico's commodity-linked currency was hammered by a collapse in oil prices, but analysts suggest that an improvement in the crude market could be a key driver in bringing back demand for the currency.

"Having been hit especially hard by the sell-off in oil, the Mexican peso now looks undervalued based on both its five-year average and trend. This, coupled with our view that oil prices will recover to $45 per barrel by end-2020, suggests the peso's weakness won't last," said Oliver Jones, senior markets economist at Capital Economics.

Mexican stocks jumped 3%, recovering from two days of losses, but underperformed Latin American peers for the week.

Sentiment on the day was bolstered by US President Donald Trump outlining a three-stage plan to resume economic activity, while a report of encouraging partial data from trials of US company Gilead Sciences' experimental drug in treating severe COVID-19 patients also helped.

Still, MSCI's Latin American currencies index ended the week lower, after dismal economic readings through the week chipped away at risk appetite.

A spike in weekly US jobless claims, along with China- one of Latin America's largest trading partners- marking a steep first-quarter economic contraction, underscored a likely worsening of economic conditions in the near term.

The International Monetary Fund also said on Thursday that the economic fallout of the pandemic, combined with other problems in recent years, meant Latin America and the Caribbean would likely see "no growth" in the decade from 2015 to 2025.

The Colombian peso fell the most for the week with a 2.9% drop, also hurt by the weakness in the oil market.

Brazilian stocks rose about 1.5%, despite deepening political rifts in the country after Brazilian President Jair Bolsonaro fired his health minister on Thursday after clashing with him over how to fight the new coronavirus.

Talks of government bailouts for select corporate sectors have propped up the Bovespa over recent sessions.

The real was flat.

The Argentine peso hit a record low versus the dollar after the country sketched out its debt restructuring proposal to international creditors on Thursday.