Latin American currencies bounced higher on Monday, led by Chile's peso as data showed economic activity in the country picked up in December even as fears around the coronavirus epidemic weighed on most other emerging markets.
The Chilean peso strengthened 0.9% to 792.17 against the greenback, on track to break a three-day losing streak after central bank figures showed a 1.1% rise in the country's economic activity during December.
The peso touched historic lows last year after months of violent anti-government protests but the latest reading on the economy was supported by a resilient mining sector.
"Mining and manufacturing boost industrial production and labor market shows signs of resilience after social outbreak (in Chile)," analysts at Scotiabank wrote in a note.
"As of December 2019, there was greater optimism in international trade, given the imminent signing of phase one of the US-China trade agreement."
MSCI's index for Latin American currencies rose 0.8% after two straight days of declines.
Emerging markets in Asia came under pressure from a 7.8% drop in China shares as investors feared the virus outbreak would hit demand. Brazil's real also rose, bouncing back from a record low in the previous session. A survey of purchasing managers' activity showed growth in Brazil's manufacturing sector picked up in January.
However, a central bank survey of economists showed the real's slide to its weakest level on record is not fueling expectations of higher domestic inflation or interest rates.
In Argentina, Buenos Aires province has offered to make a $75 million capital payment on a 2021 bond, a last-gasp move to encourage holders of the debt to accept its proposal to delay a larger repayment and avoid the risk of falling into default. The Argentine peso eased slightly against the dollar.
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