Mexico's peso weakened on Friday as uncertainty over a Spanish bailout left investors unwilling to take risk in emerging markets, while a drop in copper prices further weighed on the Chilean peso. The Brazilian real was stable, however, as trading slowed to a near halt on concerns over a possible central bank intervention in the market.
The Mexican peso dropped 0.45 percent to 12.90 per US dollar as a summit of EU leaders concluded without signs on whether Spain would request financial aid, a step investors see as crucial to curbing the spread of the euro zone debt crisis. "People were hoping that there was going to be some more definition, but it looks like the government of Spain is in no hurry," said Rafael Camarena, an economist at Santander in Mexico City.
Data from the Commodity Futures Trading Commission showed the number of investors betting on a stronger peso dipped in the latest week of data, but still hovered near a record high. Mexico's peso has been one of the top performing emerging market currencies this year, supported by improving economic data in the country's top trading partner, the United States. But gains have flagged in recent weeks.
The Mexican peso ended the week about 0.3 percent weaker against the dollar. The Chilean peso lost 0.4 percent to 474.60 per greenback as prices of copper, the country's main export product, fell on concerns over China's demand for the metal. The peso shed about 0.5 percent during the week. In Brazil, however, fears of government intervention have reduced trading volumes in the real, leaving the currency little changed at 2.0272 per dollar. The real gained about 0.6 percent during the week, nearing the 2 per dollar level that often triggers intervention by the central bank.