The Brazilian real, along with Latin American currencies, began 2024 with a significant devaluation, amid a strengthening of the dollar globally, at the beginning of a week in which they expect important data on the US economy that could provide clues about the expected next start of interest rate cuts in the world’s leading economy.
He dollar indexwhich measures the performance of the US currency against a basket of six major currencies, rose 0.79%, after closing 2023 with a drop of 2%breaking two years of gains, as investors weighed the possibility of the Fed cutting rates as soon as the first quarter of this year.
Brazilian real devalued more than 1% against the dollar
The Brazilian real depreciated 1.32% near the close, to 4.9166 units per dollar, while the Bovespa index of the Sao Paulo B3 stock market fell 1.37%, to 132,354.79 points. The Minister of Finance of Brazil, Fernando Haddad, believes that the country’s reference interest rate could be one percentage point below the current 11.75%, he said in an interview published this Tuesday. The central bank of Latin America’s largest economy began a cycle of monetary easing in August, after keeping rates at 13.75%, their highest level in six years, for almost a year.
But the losses in the region were led by the Chilean peso, which fell 1.39%, to 885.50/885.80 units per dollar. Meanwhile, the leading index of the Santiago Stock Exchange, the IPSA, fell 0.24%, to 6,183.69 points. The Chilean economy registered an increase of 1.2% year-on-year in November, the Central Bank reported on Tuesday. The Monthly Indicator of Economic Activity (Imacec), which represents close to 90% of the Gross Domestic Product (GDP) of the South American country, increased 0.3% in seasonally adjusted terms compared to October.
For its part, The Mexican peso was trading at 17.0410 units, with a decline of 0.45%, in its fourth consecutive day of losses. The Mexican peso ended its best year in more than three decades on Friday, driven by the central bank’s high interest rates, although analysts believe that in 2024 it could subside much of an increase that has surprised everyone and everyone, as the Monetary policy begins to relax. The main stock index S&P/BMV IPC, which makes up the 35 most liquid companies in the Mexican market, fell 1.11%, to 56,748.71 units, dragged down by global risk aversion.
Lastly, The Colombian peso lost 0.15% to 3,880 units per dollar and on the stock market, the MSCI COLCAP benchmark index rose 1.72% to 1,215.70 points before the close of operations.
This week, markets’ attention will focus on the minutes of the latest Fed meeting and data on job openings and nonfarm payrolls for December.
Source: Ambito
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