Mexican peso pops among Latam FX, stocks jump
Brazil services activity jumps to record high in July
Colombian govt proposes new fiscal reform
Vale bumps up 2024 iron ore production forecast, shares rise
Stocks rise 0.8%, FX up 0.2%
Updated at 1945 GMT
By Johann M Cherian and Shubham Batra
Sept 11 (Reuters) -Mexico's peso outperformed Latin American currencieson Wednesday after lawmakers finalized a judicial overhaul, while regional stocksjumpedafter Brazil's Vale raised its annual iron ore production forecast.
Mexico's peso MXN= traded at 19.78 per dollar and was on track for its biggest one-day jump in nearly three weeks, with a bounce in oil prices aiding some gains.
The country's Senate approved a sweeping reform where judges would be elected by popular vote, a radical transformation that has been criticized for putting the country's economy and rule of law at risk.
The peso has logged losses of more than 14% since June - the month when president-elect Claudia Sheinbaum voiced strong support for the reforms immediately after securing a landslide electoral victory.
Thierry Wizman, global FX & rates strategist at Macquarie, said that traders are worried about not just lowered foreign investment into Mexico, but damaged commercial relations between the U.S. and Canada that threatens the dissolution of U.S.-Mexico-Canada free-trade agreement.
He said the day's gains will be a brief pop and the currency's losses sustained thus far will be permanent.
MSCI's gauge for Latin American currencies .MILA00000CUS inched 0.2% higheragainst the U.S. dollar as investors assessed a U.S. inflation report ahead of the Federal Reserve's next monetary policy meeting.
Odds favouring Democrat Kamala Harris over Republican Donald Trump following a fierce U.S. presidential debate ahead of November elections also aided some optimism in the region.
The former U.S. president's policies on trade, immigration and security are seen as a negative for Latin American economies that are mostly led by left-leaning governments.
Brazil's real BRL= edged up 0.3% after data showed service sector activity jumped to a record high in July, cementing expectations that the central bank will hike borrowing costs by 25 basis points at its meeting next week.
Colombia's peso COP= reversed earlier losses to rise 0.3% against the greenback, snapping three days ofdeclines. The government proposed a new fiscal reform to raise an additional $2.84 billion through higher taxes and other measures to finance part of next year's budget.
Concerns around fiscal instability have weighed on the currency which is trading near 11-month lows.
Currencies of copper producers Chile CLP= and Peru PEN= appreciated 1%and 0.7%, tracking a rebound in prices of the red metal. MET/L
On the equities front, MSCI's index tracking regional stocks.MILA00000PUS jumped 0.8% to a nearly three-week high,with Argentina's Merval index .MERV up 3.2%.
The country's monthlyinflation rate stood at 4.2% in August, above a Reuters forecast of 3.9% and slightly up from 4.0% in July.
Brazil's Bovespa .BVSP edged up 0.3%, with miner ValeVALE3.SA up around 3%after the mining group raised its annual iron ore production forecast following a stronger-than-expected first half.
Key Latin American stock indexes and currencies:
Stock indexes | Latest | Daily % change | YTD % change |
MSCI Emerging Markets .MSCIEF | 1058.91 | -0.37 | 3.73 |
MSCI LatAm .MILA00000PUS | 2192.82 | 0.78 | -18.29 |
Brazil Bovespa .BVSP | 134662.15 | 0.26 | 0.36 |
Mexico IPC .MXX | 51292.65 | 0.63 | -10.62 |
Chile IPSA .SPIPSA | 6301.88 | 1.4 | 1.68 |
Argentina MerVal .MERV | 1771916.87 | 3.308 | 90.59 |
Colombia COLCAP .COLCAP | 1314.52 | 0.07 | 9.98 |
Currencies | Latest | Daily % change | YTD % change |
Brazil real BRBY | 5.6510 | 0.02 | -41.37 |
Mexico peso MXN=D2 | 19.7956 | 1.51 | -0.49 |
Chile peso CLP=CL | 939.9 | 0.94 | -34.60 |
Colombia peso COP= | 4260.5 | 0.37 | -30.01 |
Peru sol PEN=PE | 3.7667 | 0.73 | -14.06 |
Argentina peso (interbank) ARS=RASL | 957.5000 | 0.05 | -98.06 |
Argentina peso (parallel) ARSB= | 1265 | 1.19 | -98.48 |
Reporting by Johann M Cherian and Shubham Batra in Bengaluru. Editing by Jane Merriman and Nick Zieminski
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