Latin American stocks and currencies rallied on Wednesday on continued signs of progress in US-China trade talks and reduced fears of slower global growth as China reported positive economic data. Comments from White House economic adviser Larry Kudlow on Tuesday that the United States and China "expect to make more headway" in trade talks this week, and a survey showing activity in China's services sector picked up to a 14-month high in March, boosted buying.
Among regional currencies, Brazil's real firmed 0.4 percent to its highest in a week and a half against a weaker dollar, while Mexico's peso rose 0.2 although tensions at its border with United States kept gains in check.
US President Donald Trump took a step back on Tuesday from his threat to close the US southern border to fight illegal immigration, but he demanded on Wednesday that Mexico take immediate steps to deal with immigration to avert the closure. But Morgan Stanley said its analysts "believe that investors would be more comfortable owning risk in Mexico."
"Markets are pricing in risks much better and the country is likely to avoid any short-term reaction from rating agencies, as budget numbers keep surprising to the upside, while the monetary policy stance remains one of the tightest across EM." Stocks in Sao Paulo rose 0.8 percent on broad-based gains, while most other bourses across Latam rose, in line with a rally in world stocks. Mexican shares climbed 0.7 percent, while those in Colombia rose after two days of declines. Chile's peso jumped more than 1 percent, with rising prices of the country's main export, copper, providing a boost. Stocks in Santiago climbed 0.2 percent.
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