Latin American currencies started the week on a firm footing on Monday, as improving sentiment around trade relations between the United States and China discouraged safe-haven buying of the dollar, exacerbating its fall.
MSCI's index for Latin American currencies rose 0.3% and was on track to post its strongest monthly gain since January.
"The dollar seems to be out of love as we approach the new year," Hussein Sayed, chief market strategist at FXTM wrote in a note.
"As fears of a global recession have dissipated... expect to see some rotation from the US into emerging markets. If this scenario plays out, expect the dollar to remain under pressure for the next couple of weeks."
With most market players gearing up for a holiday-shortened week, analysts do not expect significant moves until the start of the New Year.
Adding to the upbeat sentiment was a report from the South China Morning Post that said Chinese Vice Premier Liu He will visit Washington this week to sign a Phase 1 trade deal with the United States. Brazil's real and the Colombian peso were the firmest among their Latin American peers.
Brazil's public-sector finances improved further in November, central bank figures showed, as the deficit as a share of the overall economy shrank to its smallest in over a year and the national debt fell for the third straight month.
Comments
Comments are closed.