Latin American currencies and stock markets were mixed on Wednesday, amid a global advance in the dollar, with the markets’ attention focused on the decision to be announced later by the Federal Reserve. from the United States, after its two-day monetary policy meeting.
* The US currency was seen as a safe-haven currency and hit a new two-decade high on concerns of an escalation in the war between Russia and Ukraine, after Russian President Vladimir Putin called up 300,000 reservists and hinted to the West that he was willing to use nuclear weapons, just before the expected Fed decision.
* Later in the day the Fed is expected to raise rates by three-quarters of a percentage point for the third consecutive time and signal how much more and how fast the cost of borrowing must rise to control inflation.
* The losses were led by the Chilean peso, which lost 0.96% to 940.80/941.10 units per dollar amid high volatility. Meanwhile, the leading index of the Santiago Stock Exchange, the IPSA, gained 0.25%, to 5,353.47, after closing with a sharp drop the day before.
* The Brazilian real depreciated 0.68%, to 5.1761 units per dollar, while the Bovespa index of the Sao Paulo B3 stock exchange lost 0.25%, to 112,234.34 points.
* The Mexican peso was trading at 19.9884 per dollar, down marginally 0.03% from Tuesday’s Reuters benchmark price, pending the Fed’s monetary policy decision.
* “Despite the calm that has been shown, we expect a volatile session,” said Monex Grupo Financiero. “There is high uncertainty about the direction of the break, but we think the odds are tilted towards a ‘hawkish’ stance from the Fed, which would put upward pressure.”
* The main stock index S&P/BMV IPC , which includes the 35 most liquid companies in the Mexican market, gained 0.25% to 47,181.38 units, amid caution due to external events.
* In Argentina, the peso fell 0.21% to 144.95 per dollar in depreciation regulated by the central bank, while the Merval stock index lost 0.38% to 147,370.37 units due to a higher risk aversion.
* The Merval “is moving away from the 500 point level (measured in dollars), standing 30 points from its maximum level in the year, but still 77 (points) from its value at the end of 2021, maintaining an accumulated gain ( in dollars) so far this year of 18.93%”, said Portfolio Personal Investments.
* The Colombian peso opened with a rise of 0.33% to 4,411.30 units per dollar, while the benchmark index of the stock market, the MSCI COLCAP, climbed 1.50% to 1,212.71 points.
* The Peruvian currency, the sol, gained 0.05%, at 3.8970/3.900 units per dollar. Meanwhile, the benchmark of the Lima Stock Exchange fell 0.59% to 510.48 points.