July 28, 2020 / 7:51 PM / 9 days ago

EMERGING MARKETS-Colombian peso hits lowest in a month on weak oil price

    * Colombian peso touches lowest level since July 1
    * Oil prices weaken on rough sledding for U.S. fiscal
package
    * Brazil posts record current account surplus
    * Carrefour Brasil up on after quarterly results beat

 (New throughout, updates prices, market activity and comments)
    By Shreyashi Sanyal and Susan Mathew
    July 28 (Reuters) - The Colombian peso touched its lowest in
four weeks on Tuesday as weaker crude prices pressured the oil
exporter's currency after talks for a U.S. coronavirus aid
package stalled, feeding fears about the fuel demand outlook in
the world's largest consuming country. 
    The peso fell 1.2% against the dollar. Oil prices
weakened as U.S. congressional Democrats criticized as
inadequate a $1 trillion aid package that U.S. Senate
Republicans proposed on Monday.
    Investors eyed a Colombian central bank policy meeting at
the end of the week, with expectations for a 25-basis-point cut
to the key lending rate. 
    Other currencies in Latin America were flat to higher
against the dollar which steadied after bouncing off two-year
lows. Analysts expected further weakness in the greenback on
rising bets that the U.S. Federal Reserve will maintain very
loose monetary policies at the end of its two-day meeting on
Wednesday. 
    "Fed officials have made clear that they will be making
their forward guidance more dovish and outcome-based soon,"
analysts said in a TD Securities client note. 
    Brazil's real erased early losses to trade 0.2%
higher. Data showed Brazil posted a record current account
surplus in June, and attracted portfolio inflows for the first
time since before the pandemic.
    Separately, official figures showed Brazil's labor market
may be over the worst of the coronavirus crisis after losing 1.2
million formal jobs in the first half.
    Brazil stocks rose 0.1% with Carrefour Brasil
 up 4.7% after reporting stronger-than-expected
quarterly results.
    Mexico's peso traded marginally higher after
retracing early losses. The national oil company Pemex said
losses narrowed during the second quarter, although Latam's most
heavily indebted company said its debt rose nearly $2.4 billion
to $107.2 billion.  
    On Thursday, data is expected to show Mexico's economy
contracted at historic levels of 17.7% in the second quarter,
according to a Reuters poll of analysts.  
    Argentine over the counter bonds fell an average
0.7%. The country's main creditors said their latest debt
restructuring proposal has support from investors holding more
than half the country's foreign debt, bolstering their case for
countering the government's most recent offer.

    The broader emerging market currency index
was pressured by a tumble in the Turkish lira which
analysts said reflected pent-up selling pressure that has been
restrained by interventions to keep the currency stable.

    Key Latin American stock indexes and currencies 1923 GMT:
  Stock indexes           Latest   Daily %
                                   change
 MSCI Emerging Markets    1082.57     0.88
                                   
 MSCI LatAm               2118.84     0.04
                                   
 Brazil Bovespa         104595.84     0.11
                                   
 Mexico IPC              37665.63     -0.2
                                   
 Chile IPSA               4073.50     0.27
                                   
 Argentina MerVal        48932.00   -1.047
                                   
 Colombia COLCAP          1169.36    -0.96
                                   
                                          
      Currencies          Latest   Daily %
                                   change
 Brazil real               5.1462     0.21
                                   
 Mexico peso              21.9228    -0.04
                                   
 Chile peso                 765.3     0.27
                                   
 Colombia peso            3722.75    -1.48
                                   
 Peru sol                   3.508     0.00
                                   
 Argentina peso           72.1300    -0.07
 (interbank)                       
                                   
 
 (Reporting by Shreyashi Sanyal in Bengaluru; editing by
Jonathan Oatis and David Gregorio)
  
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