June 12, 2020 / 2:29 PM / 2 months ago

EMERGING MARKETS-Mexico's peso up strongly after brutal selloff; Brazil's real down

    By Susan Mathew
    June 12 (Reuters) - Brazil's real slid on Friday as it
caught up with a rout in markets, while other Latin American
currencies firmed against a steady dollar with Mexico's peso
looking to recover from its heaviest sell-off in three months.
    The peso surged 2.4%, on track to post its biggest
one-session gain in 11 weeks after the currency lost nearly 4%
on Thursday as worries over a prolonged economic recovery were
exacerbated by fears of a second wave of COVID-19 infections in
the United States, hitting oil prices.
    Crude recovered on Friday, also helping exporter Colombia's
peso snap a four-session losing run.
    The greenback's retreat after a safe-haven surge further
boosted gains for emerging market currencies. 
    "Risk appetite has picked itself up off the floor," said Ned
Rumpeltin, European head of FX strategy at TD Securities, but
"confidence remains very fragile and that still seems firmly in
the driver's seat for now."
    Returning from a day's holiday, the real slipped 1%,
while Sao Paulo-listed stocks were set for their worst
day in six weeks.
    Most other regional bourses recovered strongly as they
tracked Wall Street higher, but concerns remained as Latam
becomes the latest epicenter of the novel coronavirus outbreak.
Brazil is the second worst hit worldwide in terms of number of
cases while deaths in Mexico approached 16,000.
    Lockdowns to curb the virus have already hammered markets,
with Mexico facing its steepest recession in decades while
economic indicators in Brazil paint a dour picture. 
    MSCI's Latam stock and currency indexes
 are both set to end the week lower after three
weeks of gains. 
    Next week investors will be looking forward to a central
bank meeting in Brazil, retails sales from the United States and
developments on Europe's stimulus program. 
    Key Latin American stock indexes and currencies at 1412 GMT:
  Stock indexes           Latest   Daily %
 MSCI Emerging Markets     989.23    -0.44
 MSCI LatAm               1979.00    -0.79
 Brazil Bovespa          92776.75    -2.02
 Mexico IPC              37423.16     1.62
 Chile IPSA               4017.86     1.87
 Argentina MerVal               -        -
 Colombia COLCAP          1149.45     2.49
      Currencies          Latest   Daily %
 Brazil real               5.0201    -1.64
 Mexico peso              22.2360     2.25
 Chile peso                788.43     0.63
 Colombia peso            3738.68     0.66
 Peru sol                  3.4527     0.17
 Argentina peso           69.3700    -0.07
 (Reporting by Susan Mathew in Bengaluru;
Editing by Alistair Bell)
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