BRASILIA: Latin American stocks and currencies were slightly down on Friday but poised for annual gains as investors head into 2024 with a relatively higher risk appetite on bets of reduced US borrowing costs.

The MSCI index tracking Latin American stocks edged down 0.3% by 1452 GMT. The equity index is set for an annual gain of 25%, its best year since 2016.

A basket of regional currencies was down 0.2% against the dollar and set for annual gains of about 23%, its best year since 2009.

The dollar index, however, is set to fall 2%, snapping a two-year winning streak.

Latin American assets are set for a strong end to the year after the US Federal Reserve’s dovish stance was followed by positive economic data, which bolstered hopes of rate cuts as early as March.

Across emerging markets, the Colombian peso is set to be the best-performing currency with annual gains of 25%, its best year since 2004, while the Mexican peso is on track for a yearly gain of 15%, taking the title of the second-best performing currency and set for its best year since 1990.

Among stocks, Brazil’s Bovespa index, the Peruvian Lima Index and Mexico’s IPC stocks index are set to post yearly gains of 22%, 21% and about 19% respectively.

Argentina’s Merval index rose 1.5%, while one of the most influential workers unions in Argentina has called for a national strike next month as opposition to the government’s overhaul of the economy builds.

Earlier this week, Argentine President Javier Milei sent a reform bill to Congress proposing far-reaching changes to the country’s tax system, electoral law and public debt management.

On the data front, Brazil’s jobless rate fell to 7.5% in the three months through November, in line with market expectations.

Copper output in Chile, the world’s largest producer of the red metal, decreased 3.1% year-on-year in November to 444,905 metric tons.

For the day, among regional bourses, the Bovespa index was muted, Chilean stocks fell 0.7% and Colombia’s Colcap index was up 0.6%.

The Brazilian real was down 0.5%, the Mexican peso ticked up 0.3% and the Chilean peso climbed 1.5% for the day.

Shares of Engie Brasil rose 0.2% after the firm said on Thursday it had reached a deal to sell a 15% stake in natural gas pipeline firm TAG to Canadian investment fund Caisse de Depot et Placement du Quebec (CDPQ) for 3.1 billion reais ($641 million).