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Colombian peso hits lowest level since June 2023

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Brazil unemployment drops to second-lowest level on record

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MSCI Latam stocks index off 0.7%, FX up 0.2%

(Updated at 4:00 p.m. ET)

By Johann M Cherian and Ankika Biswas

Oct 31 (Reuters) - Most currencies in Latin America

lacked momentum on Thursday, and were on track for monthly

losses, while Colombia's peso fell following a 50-basis-point

interest rate cut by the country's central bank.

The Colombian peso was down nearly 0.3% against

the U.S. dollar, hitting its lowest level since June

2023.

Colombia's central delivered a widely expected

50-bps rate cut

at 9.75%, citing economic uncertainties from U.S.

elections, while also revising its 2024 growth prediction upward

and trimming its inflation forecast.

MSCI's index tracking Latam currencies

was up 0.2%, while the stocks gauge was down

0.7%.

Both the indexes were on track for their worst monthly

performance since June, hurt primarily by risk aversion ahead of

a tight U.S. presidential race next week.

Some investors have increasingly bet that Republican

candidate Donald Trump will win, helping to lift the dollar and

U.S. Treasury yields, although he is still neck and neck with

Democratic Vice President Kamala Harris in several polls.

Analysts see Trump at loggerheads with most left-leaning

governments in the region and his policies on trade, security

and migration are considered inflationary and unfriendly to

trading partners.

"Markets continue to be in a mini regime of heightened

volatility ahead of U.S. elections, with polling outcomes still

very close to 50-50. The risk appetite remains low as the

results can be binary, especially for some EM jurisdictions,"

Goldman Sachs analysts noted.

"We think that rates will continue to trade in a range

to slightly higher."

Brazil's real dipped 0.3% against the greenback, on

track for its fifth-straight day in the red.

The country's labor market is posting blockbuster numbers

ahead of next week's rate decision, amid bets of a sped-up

monetary tightening due to inflationary risks.

Data showed

Brazil's jobless rate

fell to 6.4% in the three months through September, below

market expectations and marking the second-lowest unemployment

level on record.

Brazilian lender Bradesco's shares fell

nearly 4%, even after posting a slightly higher-than-expected

third-quarter net income

, dragging the country's main stock index 0.6% down

to a one-week low.

Mexico's peso climbed 0.6% against the dollar,

firming after a four-day losing streak, but still hovering over

20-per-dollar mark.

Set for its fourth monthly decline in five, the peso has

been the most sensitive to volatility in the run-up to U.S.

elections. Analysts expect a Donald Trump victory to quickly

weaken the peso to more than 21-per-dollar.

Amid an ongoing judicial overhaul, the country's lower

house of Congress approved a measure that makes changes to the

constitution "unchallengeable."

Key Latin American stock indexes and currencies:

MSCI Emerging Markets 1120.83 -0.5

MSCI LatAm 2125.11 -0.65

Brazil Bovespa 129865.24 -0.59

Mexico IPC 50635.33 -0.48

Chile IPSA 6550.32 NULL

Argentina Merval 1855851.06 0.997

Colombia COLCAP 1360.63 0.31

Brazil real 5.778 -0.26

Mexico peso 20.0142 0.64

Chile peso 961.12 0.06

Colombia peso 4422.6 -0.27

Peru sol 3.773 -0.21

Argentina peso (interbank) 990.5 -0.15

Argentina peso (parallel) 1170 0.85