Latin American currencies weakened on Friday as stronger-than-expected US economic data fuelled fears of an early withdrawal of stimulus measures by the Federal Reserve, while lingering concerns about the Chinese economy hit the outlook for commodity exporters.
US consumer sentiment rose in July to its highest level in six years, according to a survey, providing yet another argument for the Federal Reserve to cut down on a stimulus program that for years has supported appetite for emerging market currencies. The Brazilian real lost 0.7 percent even after the central bank sold 20,000 traditional currency swaps, derivative contracts that emulate a sale of dollars in the futures market. The Mexican peso lost 0.4 percent, also hurt by central bank minutes showing that policymakers are ready to cut interest rates if growth keeps slowing.
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