By Susan Mathew
April 3 (Reuters) - Most Latin American currencies weakened
on Friday, putting an index of regional currencies on course to
mark its seventh straight weekly loss as recession fears kept
the safe-haven dollar well-bid despite a dismal U.S. jobs
report.
Brazil's real slipped 0.8% to a record low, while
Mexico's peso dropped 1.7%, taking MSCI's index of
regional currencies down 1%. The index is set to
end the week about 3.5% lower.
Colombia's currency, meanwhile, firmed 1% as oil
prices jumped.
An OPEC source saying the cartel and its allies are working
on a deal for an unprecedented production cut equivalent to
about 10% of global supply sent oil prices soaring, adding to a
more than 20% surge on Thursday.
Following a jump in U.S. jobless claims over the last two
weeks, data on Friday showed job losses in March were
significantly higher than anticipated. The data all but
confirmed a recession.
Investors scurried to the safety of the greenback as
analysts predict April's number to be much larger due to
wide-spread shutdowns to curb the spread of the novel
coronavirus.
"It's important to see the numbers going forward and to see
how the aid packages play out. In the bigger picture this data
doesn't mean that much, until we get a better picture of how the
whole situation plays out," said Justin Lederer, treasury
analyst at Cantor Fitzgerald in New York.
The data painted a bleaker picture for economies in Latam,
such as Mexico, that are highly dependant on the United States.
March service sector numbers coming in weaker in many
emerging economies, including Brazil, further dented sentiment.
Wall Street stock indexes fell following the jobs report,
and most regional markets followed suit. MSCI's Latam stocks
index was set for a weekly loss of around 3.8%.
A 4.2% slump in Brazil's Bovespa index was led by an
11% drop in shares of steelmaker Usiminas after the
company announced a production cut amid a sharp decline in
demand due to the COVID-19 pandemic.
Chilean stocks jumped 3.8%, led higher by a 14%
surge in utility Enel Americas after Italian
majority shareholder Enel said it would raise its
stake in the company to 65%.
Key Latin American stock indexes and currencies at 1433 GMT:
Stock indexes Latest Daily %
change
MSCI Emerging Markets 831.34 -0.86
MSCI LatAm 1478.04 -3.72
Brazil Bovespa 69152.57 -4.29
Mexico IPC 33448.36 -0.42
Chile IPSA 3694.17 3.79
Argentina MerVal 26365.73 1.394
Colombia COLCAP 1106.11 -0.75
Currencies Latest Daily %
change
Brazil real 5.2970 -0.61
Mexico peso 24.5897 -1.50
Chile peso 864.2 -0.62
Colombia peso 4005.36 0.47
Peru sol 3.4548 -0.43
Argentina peso 64.8600 -0.22
(interbank)
(Reporting by Susan Mathew in Bengaluru; Editing by Dan
Grebler)
Source: Read Full Article