Mexico’s peso surges 2%, Argentina extends debt deadline

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

* Brazil’s real up 2.8%, Colombian peso at 3-week high * Argentina extends debt restructuring deadline to June 12 * Analysts see Mexican peso outperforming in near-term By Susan Mathew June 2 (Reuters) – Latin American currencies rallied on Tuesday with Mexico’s peso hitting 11-week highs as hopes of recovery from a likely deep recession buoyed sentiment. Regional stocks surged, tracking a higher open on Wall Street. Brazil’s Bovespa index scaled 12-week highs, while Mexican stocks hit three-week highs. Mexico’s peso rose 2%, extending gains to an 11th session in 12 against a weaker dollar. The peso has gained about 10% over the period with analysts expecting the currency to outperform regional peers in the short term as it benefits from global growth momentum as economies reopen. Given that monetary and fiscal measures have postponed near-term funding distress, it is possible to position for a recovery in emerging markets from March lows, said Goldman Sachs analysts, pointing to the Mexican peso and the Bovespa as Latam beneficiaries. Rising oil prices lifted Colombia’s peso to near three-month highs, while Brazil’s real led gains in Latam, up 2.8%. Brazil’s government launched a new emergency credit line of 20 billion reais ($3.73 billion) to help small and mid-sized companies. But, the economic outlook for Latam’s largest economy continued to be bleak, with the country’s treasury department expecting Brazil to end 2020 with debt at 94% of GDP unless the government shows commitment to fiscal reforms. An ongoing federal investigation into Brazilian President Jair Bolsonaro added to woes. The speaker of Brazil’s lower house of Congress on Monday did not dismiss the possibility of opening impeachment proceedings against Bolsonaro. Argentina, meanwhile, extended the deadline to restructure its $65 billion sovereign debt to June 12 and said it may sweeten its most recent offer to creditors. The country is already in default after having missed an interest payment extension on May 22. The government may improve its offer less than what creditors expect, given the International Monetary Fund’s backing for its current deal, Citigroup analysts said. “But this argument is unlikely to be very effective as the IMF’s debt sustainability assessment treats Argentina’s macroeconomic policies as exogenous, which is obviously not the case,” they said. Concerns also stem from the widening gap between the official and black market rate of the Argentine peso. The currency is being held artificially high by strict currency controls, even as fears over the economy and demand for dollars drive unofficial rates to record lows. Key Latin American stock indexes and currencies at 1430 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 968.44 1.78 MSCI LatAm 1894.62 4.02 Brazil Bovespa 89996.63 1.55 Mexico IPC 37618.38 1.72 Chile IPSA 3772.83 2.36 Argentina MerVal 41223.64 3.015 Colombia COLCAP 1124.18 0.64 Currencies Latest Daily % change Brazil real 5.2350 2.79 Mexico peso 21.5960 1.98 Chile peso 780.9 1.61 Colombia peso 3649.6 1.66 Peru sol 3.4037 0.47 Argentina peso 68.7000 -0.10 (interbank)

This article was originally posted on finance.yahoo.com/news/.

Home of Science
Follow me

- Advertisement -

Discover

Sponsor

Latest

Eight Afghan soldiers die fighting off Taliban attack on key city

Eight Afghan soldiers were killed on Tuesday while repelling a fierce Taliban attack on Kunduz, a strategic city in northern Afghanistan that had briefly...

These two signals will soon tell us if investors are fighting a ‘losing game’ with stocks, says top strategist

Oil is wobbling again and we’re in the thick of earnings season where no one expects great news. But that is not stopping stocks...

Why Did Priyank Chopra Write Only Good Books?

Why Did Priyank Chopra Write Only Good Books?People like Priyank Chopra's books. They are not really that many, but they all seem to...

Democratic Senator: Trump’s executive order on tech would silence the ‘little guy

Sen. Ron Wyden on Tuesday slammed President Donald Trump’s executive order signed last week, which seeks to strip online platforms of liability protections for editing or removing user-generated...

Four Types of Businesses That You Can Start Today

One of the most important decisions that you have to make when you are starting your own business is to choose what type of...
Home of Science
Follow me