EMERGING MARKETS-Brazil real up; Most Latam FX pressured by rising U.S. bond yields.

Yahoo Finance

Susan Mathew

Most emerging market currencies pared gains and some Latam currencies turned negative as U.S. Treasury yields rose on reports of a $6 trillion U.S. budget for 2022. Brazil's real bucked the trend to rise 0.4%, putting it on course to mark the biggest weekly gain among major Latam peers. A survey on Thursday showed Brazilian industrial confidence rose in May, the first rise in five months. But separate data showed unemployment hit a historic high of 14.7% in the quarter to March. "BRL poses an interesting risk-reward profile, but real yield levels remain relatively low for now," said FX strategists at TD Securities. Chile's peso gave up gains of up to half a percent made on higher copper prices, to trade 0.4% lower. The currency had posted its best session in almost two weeks on Wednesday after the copper price was lifted by workers threatening to strike at the world's biggest copper mine, Escondida. U.S. Treasuries yields rose after the New York Times reported President Joe Biden will announce on Friday what analysts said could be the largest spending since World War 1. Peru's sol stayed at all-time lows with all eyes on the final round of the presidential election race between two polarized candidates - the latest in a string of political risk events haunting investors in Latin America, a region struggling to keep up with its global peers despite a commodities boom. Falling oil prices on the possible return of Iranian supply kept Mexico's peso at bay. The dollar remained subdued against the backdrop of easing inflation fears keeping monetary policy accommodative, benefiting riskier currencies. But with talk of tapering rising, investors kept their eyes peeled for even the slightest mention of a shift in policy. {FRX/} Stocks in Sao Paulo rose 0.2%, inching closer to January highs, while Chilean stocks climbed more than 1%. Key Latin American stock indexes and currencies at Stock indexes Latest Daily % change MSCI Emerging Markets 1352.43 0.04 MSCI LatAm 2486.05 0.54 Brazil Bovespa 124290.17 0.24 Mexico IPC 49309.00 0.42 Chile IPSA 4183.64 1.57 Argentina MerVal - - Colombia COLCAP 1199.88 0.76 Currencies Latest Daily % change Brazil real 5.2927 0.36 Mexico peso 19.8914 -0.12 Chile peso 731.6 -0.41 Colombia peso 3734.08 0.18 Peru sol 3.853 -0.01 Argentina peso 94.5200 -0.03 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Nick Macfie).

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