Latin American currencies seesawed on Thursday as a US holiday curbed trading volumes, while traders avoided risky bets due to escalating geopolitical tensions around North Korea. North Korea said it tested an advanced hydrogen bomb for a long-range missile on Sunday and showed signs of planning more missile tests, triggering strong backlash. The United States said countries trading with North Korea were aiding its "dangerous nuclear intentions" as the United Nations Security Council mulled tough new sanctions.
The reports drove risk-aversion throughout the world, with the US dollar slipping against major safe-haven currencies, such as the Swiss Franc and the Japanese Yen. Still, market moves were somewhat limited in Latin America as many traders were away from their desks due to the US Labour Day holiday. "Without Wall Street as a reference, moves tend to be weaker due to lower liquidity," analysts at Advanced brokerage wrote in a report. The Brazilian real strengthened 0.3 percent, the Mexican peso slipped 0.4 percent and the Colombian peso was flat.
Brazil's benchmark Bovespa stock index treaded water, holding near seven-year highs. Shares of busmaker Marcopolo SA fell as much as 2.3 percent after a large fire broke out on Sunday afternoon at one of its factories, the biggest in Brazil. Marcopolo kept the factory closed on Monday but said that the fire did not damage the assembly line there.