EMERGING MARKETS-China factory data boosts Latam currencies - Reuters UK |
| EMERGING MARKETS-China factory data boosts Latam currencies - Reuters UK Posted: 01 Oct 2010 03:00 PM PDT
* Chinese manufacturing lifts demand for region's exports * Brazil's real gains 0.65 pct, Mexican peso adds 0.5 pct * Mexico enters world bond index, flows could help peso (Adds comments from Mexico finance minister, updates prices) By Samantha Pearson and Caroline Stauffer SAO PAULO/MEXICO CITY, Oct 1 (Reuters) - The currencies of Brazil and Chile soared to pre-crisis levels on Friday after data showed Chinese manufacturing picked up last month. China overtook the United States last year to become Brazil's top trading partner and has increasingly been sucking up the rest of Latin America's commodity exports. For details, see [ID:nSGE690072] "The data was good in China and it shows that it's building up its stocks again and increasing imports," said Joao Medeiros, a partner at Pioneer Corretora, one of Brazil's biggest currency brokerages. The Brazilian real BRBY firmed for the seventh straight session on Friday, the last trading day before the country's presidential election on Sunday. The currency strengthened 0.65 percent to 1.679 against the U.S. dollar on the local spot market. It was trading at its strongest level since early September 2008, just before the collapse of U.S. investment bank Lehman Brothers sparked the global economic crisis. While the real has plunged in the weeks before previous presidential elections, markets have barely reacted in the lead-up to Sunday's vote. Brazil's ruling party candidate Dilma Rousseff, who is almost certain to win, has vowed to continue current market-friendly policies, making the election a "non-event" on trading floors both in Brazil and abroad. Demand for Brazil's high-yielding debt and last week's huge share offering by state-controlled oil company Petrobras (PETR4.SA) have driven the real's sharp rally over past weeks. After soaring over 100 percent since 2003, the real is now the world's most overvalued major currency, according to Goldman Sachs. A rally in the price of copper, Chile's main export, also helped lift the Chilean currency to a 28-month high on Friday. The peso CLP= firmed 0.56 percent to 480.8 per dollar. Mounting speculation that the Federal Reserve may soon pump more money into the U.S. economy has caused the dollar to plunge this week, boosting the region's higher yielding currencies. The Mexican peso MXN= strengthened 0.52 percent to 12.525 per dollar. "The Fed has been very clear in that low rates will continue for some time, and this will punish the dollar, which is positive for the peso," said Ramon Cordova, a trader at brokerage BASE in Monterrey, Mexico. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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