SAO PAULO: Latin American currencies weakened on Thursday after China's government let the yuan decline further, triggering fears that the world's largest consumer of commodities might experience a steeper slowdown.
The move sparked a 7 percent slump in Chinese equities, resulting in an automatic trading suspension for the second time this week. Commodity prices followed suit, dragging along currencies from export-oriented economies.
The Mexican peso set an all-time low of 17.7165 to the dollar, while the Colombian peso tumbled almost 2 percent as oil prices fell to nearly 12-year lows.
The Chilean peso dropped to its lowest against the dollar since April 2003 as copper prices slipped.
"Chinese authorities are baffled and, with the lack of transparency, markets tend to overreact to any sign" of weakness, said economist Pedro Tuesta of 4Cast Inc in Washington.
The Brazilian real also retreated, but yields paid on short-term interest rates futures fell.
Some traders doubted the central bank's willingness to raise benchmark rates during the worst recession in a quarter-century and persistently high inflation.
Data on Thursday showed Brazil's industrial output dropped 2.4 percent in November, its sharpest monthly decline since December 2013.
Comments
Comments are closed.