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EMERGING MARKETS-Latam FX firm, Brazilian real up as industrial confidence rises

Shreyashi Sanyal
·3 min read

* Brazil industrial confidence hits highest since 2011 * Global risk appetite boosted by U.S. stimulus hopes * Mexican shares boosted by America Movil's Q3 profit rise By Shreyashi Sanyal Oct 21 (Reuters) - Major currencies in Latin America firmed on Wednesday as the dollar extended its declines on rising hopes for a large U.S. coronavirus relief package, while Brazil's real gained as industrial confidence hit its highest in over nine years. Global risk assets saw a boost in demand after U.S. President Donald Trump raised hopes for a breakthrough in negotiations between lawmakers on Tuesday, by saying he was willing to accept a large aid bill, despite opposition from his own Republican party. The dollar hit its lowest level in more than six weeks, as it helped support a rise in emerging market currencies. "Risk appetite continues to find its feet as investors cling to hopes the U.S. government can reach a deal on fiscal stimulus ahead of the 3 November election," said Ned Rumpeltin, European head of FX strategy for TD Securities. "The dollar is showing a more confident 'risk on' attitude with declines against the G10 and all but a handful of major EM currencies." Brazil's real rose 0.4% as a survey showed industrial confidence in October jumped to its highest since 2011, as the sector continues to rebound strongly from a coronavirus lockdown and lead the wider economic recovery. The real started the week on firmer footing after Economy Minister Paulo Guedes reassured investors that a new fiscal program will not overshoot the government's spending cap, a package which has recently raised worries about Brazil's public finances. In Mexico, data showed the country's unemployment rate fell to 5.1% in September from 5.2% in August as its economy gradually recovers from the fallout of the pandemic. Mexico's peso strengthened 0.4%. Chile's peso gained 0.2%, while the Colombian peso rose 0.7%. The MSCI's index for Latin American stocks firmed 0.7%, with Santiago shares gaining 1.5%. Chilean miner Antofagasta reported a drop in copper output during the third quarter, but maintained its guidance for the year. Mexican shares rose 0.3%, lifted by a nearly 3% jump in telecommunications giant America Movil as it said on Tuesday its net profit jumped nearly 45% in the third quarter, boosted by relaxed coronavirus lockdown measures across its key markets. Key Latin American stock indexes and currencies at 1409 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1140.05 0.54 MSCI LatAm 1963.11 0.71 Brazil Bovespa 100808.60 0.27 Mexico IPC 38345.96 0.38 Chile IPSA 3729.57 1.54 Argentina MerVal 0.00 0 Colombia COLCAP 1187.64 0.02 Currencies Latest Daily % change Brazil real 5.5884 0.39 Mexico peso 21.0399 0.39 Chile peso 784.1 0.20 Colombia peso 3793.17 0.79 Peru sol 3.599 0.00 Argentina peso (interbank) 77.6800 0.00 Argentina peso (parallel) 176 2.84 (Reporting by Shreyashi Sanyal in Bengaluru; editing by Jonathan Oatis)