MSCI’s index for Latin American currencies climbed 0.9% to a more than two-week high. Similarly, the gauge of regional stocks advanced 2.2%.
Advancing oil prices provided a boost to crude exporter Mexico’s peso MXN=, which rose by 0.5% to touch 19.65 against the dollar.
A surge in copper prices pushed currencies of top producers of the red metal higher. Chile’s peso CLP= was up 1.9% and Peru’s sol PEN= gained 0.4%.
“The chances for the economy to remain relatively stable towards growth are in emerging markets, particularly Latin America since the United States seems to be isolating itself and setting itself apart from the fully globalized system,” said Juan Perez, director of trading at Monex.
Worries about a global recession remained front and center. The International Monetary Fund (IMF) cut its growth outlook for the emerging market and developing economies for this year to 3.7%, shaving off about half a percentage point on its previous estimates issued in January.
The institution expects a contraction of 0.3% for Mexico’s economy, a stark reversal from a prior forecast of 1.4% growth, as U.S. tariffs begin to weigh heavily on exports. Mexican President Claudia Sheinbaum said she disagreed with the IMF forecast.
Brazil, the largest economy in the region, is projected to slow to a 2.0% growth rate, down from an earlier estimate of 2.2%.
Trading in Brazil resumed after an extended weekend. The local currency real BRL= strengthened 1.4% against the dollar, while the main stock index jumped 0.9%.
Brazilian central bank governor Gabriel Galipolo said the body – one of the only central banks in the region that has hiked rates of late – is trying to assess whether interest rates are restrictive enough to curb inflation given the strength of economic activity.
Argentina’s growth outlook for 2025 has been revised upwards to 5.5% from January’s 5% prediction.
The peso weakened 1% after rising sharply in the last session. The peso has seen immense volatility since the government disbanded longstanding currency controls earlier this month.
There was a wave of uncertainty around global markets as Trump ramped up his criticism of Fed chief Powell for not cutting rates on Monday, branding him a “major loser,” initiating conversations about the president’s attempt to influence the central bank and curtail its autonomy.
Elsewhere, a report said Russian President Vladimir Putin offered to halt his invasion of Ukraine across the current front line as part of efforts to reach a peace deal with the U.S.
Ukraine’s sovereign dollar bonds rose, with the 2041 maturity up over one cent on the dollar.
