Latin America Stocks Rise as Dollar Weakens After Fed Hike
Latin American stocks and currencies experienced a boost on Thursday as investors' risk sentiment improved following a weaker dollar and lower Treasury yields in the wake of the Federal Reserve's latest rate increase. The MSCI index tracking regional stocks rose by 0.6%, with Brazil's Ibovespa index adding 0.5% to its value, while the real appreciated by 0.3%. In Mexico, the peso gained 0.4% after reaching an over-one-month low of 17.2710 per dollar in the previous session.
Attention remains on Brazil's upcoming presidential elections, with a recent AtlasIntel/Bloomberg poll showing Senator Flavio Bolsonaro and President Luiz Inacio Lula da Silva in a statistical tie in a simulated runoff ahead of next month's vote. The Brazilian central bank cut interest rates by 25 basis points for the fifth consecutive meeting as signs of an economic slowdown strengthened.
The weaker dollar, which fell by 0.05% after reaching seven-week highs, and lower Treasury yields contributed to the improved risk sentiment in Latin America. Argentina's stock index gained 1.2%, while the peso rose 0.3%, and Mexico's benchmark stock index rose 0.5% as trading resumed after Wednesday's holiday.