Latin American stock markets posted significant losses on Thursday, amid heightened aversion to risky assets that buoyed the dollar in global markets and renewed fears of a global recession due to sustained rises in interest rates to deal with runaway inflation.
* The dollar gained ground against the euro and sterling on Thursday, having hit a 24-year high against the Japanese yen, as investors positioned themselves for rising US interest rates and continued to worry about the health of European economies.
* Expectations for a 75 basis point US interest rate hike at this month’s Fed meeting are rising on strong economic data, with Fed funds futures pointing to a 75% chance of an aggressive upside.
* The dollar index , which measures the performance of the US currency against a basket of six major currencies, added just over 0.8%.
* The losses were led by the Colombian peso, which weakened 1.11% to 4,478 units per dollar, in its third session of declines; while the MSCI COLCAP stock index of the stock market fell 0.46% to 1,222.68 points.
* The Chilean peso fell 0.95%, to 905.80/906.10 units per dollar, in a new day of high volatility and amid political uncertainty ahead of the next plebiscite. Meanwhile, the leading index of the Santiago Stock Exchange, the IPSA, lost 0.29% to 5,424.82 points.
* Chileans will go to the polls next Sunday in an unprecedented and transcendental plebiscite in which they must approve or reject a new constitution.
* The Brazilian real depreciated 0.77% to 5.2228 units per dollar, while the Bovespa index on the B3 Sao Paulo stock exchange fell 0.63% to 108,833.61 units.
* Brazil’s economy expanded 1.2% in the three months to June, government statistics agency IBGE said on Thursday, above the 0.9% growth expected by economists polled by Reuters.
* The Mexican peso was trading at 20.2765 per dollar, down 0.65% from the Reuters benchmark price on Wednesday, as risk aversion increased due to persistent concerns of a global recession and after China has implemented new COVID-19 lockdown measures, analysts said.
* At the local level, the market took note of a survey by the central bank (Banxico) in which private sector analysts increased Mexico’s inflation forecast to 8.13% at the end of this year and raised it to 1.9 % your estimate for economic growth.
* The main stock index S&P/BMV IPC , which includes the 35 most liquid companies in the Mexican market, fell 0.60% to 44,648.89 units, registering its fifth consecutive day of losses, due to persistent fears of a possible global recession.
* In Argentina, the peso fell 0.23% to 139.05 per dollar in depreciation regulated by the central bank, while the Merval stock index fell 0.62% to 135,400.10 units due to pending sales after its recent record, and affected by risk aversion due to persistent concerns about a global recession.
* Financial businesses are also compromised by the possible new rise in interest rates in the United States, the euro crisis and the impact of the prolonged war on Ukrainian soil.
* The Peruvian currency, the sol, lost 0.31% to 3.860/3.867 units per dollar. Meanwhile, the reference of the Lima Stock Exchange yielded 1.21%, to 482.55 points.