Latam FX stabilizes as Omicron fears ebb, Peruvian sol hits five-week highs

December 28 (Reuters) – Most Latin American currencies stabilized on Tuesday, supported by easing concerns over the Omicron variant, with Peruvian sol hitting five-week highs, while Brazilian stocks fell to a low of ‘a week due to the weakness of the miner Vale.

The MSCI Latin American Currency Index (.MILA00000CUS) edged up 0.3%, in a fifth consecutive session of gains.

Latin currencies are expected to end December higher after falling for three consecutive months. High commodity prices, easing Omicron worries, and hawkish central bank moves to curb mounting inflationary pressures have all helped the region’s emerging market currencies.

Global stock markets climbed on Tuesday, boosted by another record opening on Wall Street as investors ignored concerns about travel disruptions and store closings caused by Omicron.

“The good news is that the global economy is on the right track to expand and anchor the recovery; whereas the reopening of borders stimulates multipliers linked to tourism and the possibility of decongestion of supply chains greases industrial activity. But the road to recovery is likely. be bumpy, ”Mizuho Bank analysts wrote in a note.

The currency of the oil-exporting Mexico gained 0.1%, following sharp increases in crude oil prices, which hovered around $ 80 a barrel. The peso is on track to be the best performing currency among its Latin American peers this month, up 3.7%, followed by the Peruvian sol.

Mexican stocks (.MXX) rose 0.6% to an all-time high early in the session before stagnating.

The MSCI Latam Stock Index (.MILA00000PUS) slipped 0.3%, mainly due to weakness in Sao Paulo stocks (.BVSP), which were down 0.7%.

Brazilian miner Vale (VALE3.SA) was the biggest drag on the index. A group representing two-thirds of bondholders in Brazilian miner Samarco, a joint venture between BHP Group (BHP.AX) and Vale, has rejected a restructuring offer presented by the company, though both sides are expected to present new proposals. Read more

The Brazilian real remained stable after the unemployment rate (BRPNAD = ECI) fell more than expected to 12.1% in the three months leading up to October, the statistics agency IBGE said.

Economy ministry officials predict that a rebound in the labor market will strengthen the economy next year, but market economists are slashing their growth outlook for 2022 due to the sharp rise in interest rates in response to double-digit inflation.

Other Latin American currencies, including the Chilean peso, strengthened, while the Colombian and Argentine peso eased between 0.1% and 0.2%.

The Chilean peso is on track to be the worst performing currency among its Latam peers this year, down 20.6% year-to-date and is expected to decline for the eighth consecutive month.

Main Latin American Stock Indices and Currencies at 1920 GMT:

Reporting by Shashank Nayar in Bangalore; edited by Barbara Lewis and Richard Chang

Our Standards: Thomson Reuters Trust Principles.