Latin American currencies gained ground on Thursday, with Brazil's real and Chile's peso leading the charge in a thin volume session as investors returned from a Christmas break.
The Brazilian currency firmed at 4.05 reais against the dollar. The real has recently benefited from an improved economic outlook for Brazil.
S&P Global Ratings could boost Brazil's sovereign rating if a cut in its deficit as a percentage of GDP is confirmed, the credit firm's lead analyst for the country said, helping support the rise in the real.
Service reliability in Brazil rose in December to its highest since February.
"This reinforces our call that the current economic conditions (in Brazil) sustain more solid growth into 2020, albeit at a moderate pace," Citigroup's global head of emerging market strategy Dirk Willer wrote in a note.
The Chilean peso traded at levels not seen since early November. A monthly poll of 61 traders showed the central bank is expected to maintain Chile's interest rate at 1.75% for the next 12 months until at least January 2021.
The peso has had a rough ride following more than two months of anti-government protests.
MSCI's index of Latin American currencies rose 0.5% and looked set to close the final week of the year with gains.
Improving trade relations between Washington and Beijing has helped market players increase their exposure to riskier assets in the last month of 2019.
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