Latin American markets collapse due to risk aversion amid recession fears

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Latin American stock markets slumped on Friday as heightened aversion to risky assets amid renewed fears of a potential global recession, prompting investors to seek refuge in the dollar. propelling the US currency to new highs in more than two decades.

* The euro and sterling tumbled to new 20- and 37-year lows on Friday against a rising dollar, after data showed the slowdown in business activity in the euro zone and Britain deepened this month. and economies will likely enter a recession.

* The dollar index , which compares the currency against a basket of six other major currencies, rose just over 1.6% to its highest level in 22 years.

* “The world economy is going through an already long period of great uncertainty, which maintains a high tension in the markets that see few other options than the dollar as a safe haven asset to weather the storm in these stormy times”, said a foreign exchange trader.

* The losses were led by the Brazilian real, which depreciated 2.59%, to 5.2483 units per dollar, while the Bovespa index of the Sao Paulo B3 stock exchange fell 2.09%, to 111,690.99 points.

* The Chilean peso fell 2.58% to 969.80/970.10 per dollar, its lowest closing value in more than two months and accumulated a decline of 4.36% in the week, also affected by due to a sharp drop in the price of copper , the country’s main export. Meanwhile, the leading index of the Santiago Stock Exchange, the IPSA, lost 1.81%, to 5,207.09 units.

* Copper prices fell to their lowest level in almost two months on Friday on the strength of the dollar and fears that demand for metals will be affected by the recession after further increases in interest rates.

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* The Mexican peso was trading at 20.2000 per dollar at the close, down 1.35% against Thursday’s Reuters reference price, as investors fear the arrival of more restrictive monetary policies and fears of a possible global recession.

* The main stock index S&P/BMV IPC , which includes the 35 most liquid companies in the Mexican market, fell 2.01% to 45,395.94 units, in its third consecutive day of losses.

* “The strong sentiment of risk aversion among investors continues, while the main stock indices show relevant generalized falls,” Banorte (BMV: GFNORTEO ) said in an analysis.

* In Argentina, the peso fell 0.19% to 145.45/145.46 per dollar in depreciation regulated by the central bank, while the Merval stock index fell 4.38% to 142,931.74 units , following the trend of global markets in the face of fears about the world economic future. This indicator recorded an intraday historical maximum value of 150,971.41 points at the beginning of the week.

* “We have lived a hard day, prices sank in a general way. The international reality is similar to the crisis of 2008 (with mortgages in the United States), plus the aggravating factor of inflation (…), with the uncertainty own (Argentina) given by shocks difficult to digest”, said an analyst of the Asian private bank.

* The Colombian peso closed with a drop of 1.68% to 4,438.5 units per dollar, although in the week it accumulated a marginal drop of 0.07%. In the stock market, the MSCI COLCAP stock index lost value by 3.69% to 1,157.27 points.

* The Peruvian currency, the sol, lost 0.75%, to 3.911/3.913 units per dollar. Meanwhile, the reference of the Lima Stock Exchange yielded 2.75%, to 494.95 points.

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