Trump said he will announce plans for tariffs on automotive imports later in the day, the latest escalation in the trade war that has driven market volatility this year.
Latin American currencies depreciated on the day, led by the Colombian peso COP=, which slumped 0.8%, while Brazil’s real BRL= lost 0.6% after a more than 1% jump in the last session.
Mexico’s peso MXN= also depreciated 0.4%, and the main stock index .MXX dipped 0.7%. The country is one of the biggest suppliers of automotive products to the U.S.
An index of Latin American currencies .MILA00000CUS fell 0.6%, while an index tracking regional equities .MILA00000PUS was down over 1% and set for its worst day in more than two weeks.
Leading copper producer Chile saw its currency CLP= lose 0.8%, after reports that U.S. tariffs on the metal could be coming within weeks.
Focus was also on the Bank of Mexico’s interest rate decision on Thursday, with expectations that the central bank will cut its benchmark lending rate by 50 basis points.
“In order to get ahead of the economic damage that may come from tariffs, the central banks are going to have to be very stimulus-driven,” said Juan Perez, director of trading at Monex.
“They have to worry about inflation because price growth is one of the many results of trade wars.”
Latin American currencies have lately benefited from a weakening dollar as the uncertainty over Trump’s tariffs and other policies has raised concerns about economic slowdown in the world’s biggest economy.
The Latam currency index is up more than 9% on a year-to-date basis, while the regional stocks index has gained nearly 14%, outperforming an index of global equities
Data showed Brazil’s foreign direct investment (FDI) far exceeded expectations in February, improving the country’s 12-month inflows while its current account deficit worsened on the same metric.
Brazil’s Bovespa .BVSPadded 0.4%, boosted by rising energy stocks.
Elsewhere, Ukraine’s sovereign GDP warrant slid to its lowest since late December as a U.S.-brokered truce between Kyiv and Moscow on energy strikes appeared to falter.
The warrant lost over 2 cents to trade at 76.91 cents on the dollar, while Ukraine’s other dollar bonds gave back gains from the previous session.
Among individual stocks, JBS JBSS3.SA fell 2.7% despite the world’s largest meatpacker posting earnings above most analysts’ expectations.
