Weaker Dollar Fuels Rebound in Latin American Markets

Latin American stocks and currencies have staged a rebound in recent days, driven by a weaker US dollar and higher commodity prices. The MSCI Latin America equities index climbed 2.9 percent this week, while the regional currency gauge gained 0.7 percent.

The region's assets had been under pressure last week due to investor rotation towards tech-heavy Asian bourses and concerns about Brazil's fiscal outlook ahead of October's elections.

However, some investors see the shift towards center-right political leadership in Latin America as a positive development for the region. 'We've actually seen a pretty constructive story across the LatAm countries,' said Rohit Chopra, portfolio manager at Lazard Asset Management. 'You've seen a movement much more towards sort of center-right candidates. And I think that has been viewed positively by the market.'

Chopra also noted that higher US long-term debt yields could increase the cost of capital for emerging markets.