AGL 40.00 Decreased By ▼ -0.16 (-0.4%)
AIRLINK 129.53 Decreased By ▼ -2.20 (-1.67%)
BOP 6.68 Decreased By ▼ -0.01 (-0.15%)
CNERGY 4.63 Increased By ▲ 0.16 (3.58%)
DCL 8.94 Increased By ▲ 0.12 (1.36%)
DFML 41.69 Increased By ▲ 1.08 (2.66%)
DGKC 83.77 Decreased By ▼ -0.31 (-0.37%)
FCCL 32.77 Increased By ▲ 0.43 (1.33%)
FFBL 75.47 Increased By ▲ 6.86 (10%)
FFL 11.47 Increased By ▲ 0.12 (1.06%)
HUBC 110.55 Decreased By ▼ -1.21 (-1.08%)
HUMNL 14.56 Increased By ▲ 0.25 (1.75%)
KEL 5.39 Increased By ▲ 0.17 (3.26%)
KOSM 8.40 Decreased By ▼ -0.58 (-6.46%)
MLCF 39.79 Increased By ▲ 0.36 (0.91%)
NBP 60.29 No Change ▼ 0.00 (0%)
OGDC 199.66 Increased By ▲ 4.72 (2.42%)
PAEL 26.65 Decreased By ▼ -0.04 (-0.15%)
PIBTL 7.66 Increased By ▲ 0.18 (2.41%)
PPL 157.92 Increased By ▲ 2.15 (1.38%)
PRL 26.73 Increased By ▲ 0.05 (0.19%)
PTC 18.46 Increased By ▲ 0.16 (0.87%)
SEARL 82.44 Decreased By ▼ -0.58 (-0.7%)
TELE 8.31 Increased By ▲ 0.08 (0.97%)
TOMCL 34.51 Decreased By ▼ -0.04 (-0.12%)
TPLP 9.06 Increased By ▲ 0.25 (2.84%)
TREET 17.47 Increased By ▲ 0.77 (4.61%)
TRG 61.32 Decreased By ▼ -1.13 (-1.81%)
UNITY 27.43 Decreased By ▼ -0.01 (-0.04%)
WTL 1.38 Increased By ▲ 0.10 (7.81%)
BR100 10,407 Increased By 220 (2.16%)
BR30 31,713 Increased By 377.1 (1.2%)
KSE100 97,328 Increased By 1781.9 (1.86%)
KSE30 30,192 Increased By 614.4 (2.08%)
Markets

Latam FX dives, Brazil's real hits 5-month low ahead of rate move

  • The real slipped 0.9% to fall for the fourth straight day as Brazil's central bank was seen leaving its benchmark Selic rate at a record low of 2.0% later in the day.
  • The extension of the budget deficit in an effort to fight the effects of the pandemic is limiting the central bank's scope to cut rates further.
Published October 28, 2020

The Brazilian real touched a five-month low on Wednesday on expectations the country's central bank will leave its policy rate unchanged, while other Latin American currencies sank on uncertainty about the outcome of next week's US elections.

The real slipped 0.9% to fall for the fourth straight day as Brazil's central bank was seen leaving its benchmark Selic rate at a record low of 2.0% later in the day.

Brazil's currency was among the worst performing emerging market units this year, falling 30%, as fears remained about the country's public finances.

"The extension of the budget deficit in an effort to fight the effects of the pandemic is limiting the central bank's scope to cut rates further," said Melanie Fischinger, FX and emerging markets analyst at Commerzbank.

Most emerging market currencies weakened against the dollar as traders hedged against the possibility of a Democratic sweep in the Nov. 3 US presidential election. Gauges measuring expected swings in foreign exchange markets rose on Wednesday, with one-week contracts that cover the vote reaching their highest levels in nearly seven months.

Surging coronavirus cases also kept risk sentiment at bay, while tumbling oil prices pushed currencies of crude-exporters including Mexico and Colombia lower.

The Mexican peso tumbled more than 1%, while Colombia's peso slipped 0.7%.

Chile's peso bucked an eight-day winning streak to fall 0.3%, with local investors focusing on the country's path to reframe its constitution.

Argentina auctioned a dollar-linked bond and other debt for a total of about $3.18 billion on Tuesday, the economy ministry said, as the government looks to ease pressure on the battered peso currency. The country's peso currency was flat.

The MSCI's index for Latin American stocks tumbled 3.7%, on track for its worst one-day percentage decline in over one month.

Sao Paulo stocks tumbled 2.6%, with heavyweight miner Vale falling 2%.

Santiago stocks dropped 1.6%, weighed by a 2% decline in shares of Banco Santander-Chile after it expected to show a fall in quarterly revenue.

Comments

Comments are closed.