*
Latam FX up 0.1%, stocks flat
*
Monthly retail sales volumes in Brazil drop 0.4% in April
*
Peru interest rate decision later in the day
*
Israeli assets slide as geopolitical situation
deteriorates
(Updates to mid-session prices)
By Nikhil Sharma and Pranav Kashyap
June 12 (Reuters) -
Latin American currencies inched higher on Thursday, buoyed
by a weakening dollar, yet a complex web of global trade
uncertainty and geopolitical tensions tempered overall
sentiment.
The U.S. dollar languished around a three-year low,
still reeling from a softer-than-expected producer price
inflation print and Wednesday's underwhelming consumer price
rise.
The greenback faced additional pressure after President
Donald Trump's announcement that U.S. personnel would be moved
out from the Middle East due to escalating tensions.
The sparse details surrounding the U.S.-China
preliminary trade truce, agreed upon earlier in the week, did
little to bolster the dollar.
"It increasingly looks like higher volatility is
returning as we approach the July 9th deadlines and as the real
economic impact of the tariffs starts to filter through to the
hard data," said Kyle Chapman, FX markets analyst at Ballinger
Group.
The Trump's second term has significantly altered the
global trade landscape, sparking questions about global growth
and challenging the long-held dominance of U.S. assets in
investment portfolios.
"The tariff drama is here to stay," Chapman added.
This shift has, in turn, fueled interest in Latin
American assets, which boast lower valuations and attractive
bond yields.
In Brazil, the real slipped 0.1% against the dollar.
The government anticipates an annual fiscal boost of about
40 billion reais ($7.22 billion) from a new set of measures
formally submitted to Congress.
This comes on the heels of a contentious tax hike rollback
on certain credit, foreign exchange, and private pension
operations, which had triggered a strong backlash - the real
fell 1.2% on the day the plans were announced.
Mexico's local equity index and the peso were
largely steady. The central bank, in its biannual stability
report on Wednesday, acknowledged the country's financial system
demonstrated "resilience" despite enduring challenges such as
rising inflation and stagnant growth.
In Colombia, which is grappling with fiscal and political
turmoil, the peso rose 0.4%, while its main stock index
fell 0.7%. The government is considering a
multi-billion-dollar debt increase this year to address a
widening fiscal deficit.
Chile's peso rose 0.4% ahead of an interest rate
decision next week, with traders anticipating no change. The
Santiago stock index inched up 0.1%.
In Buenos Aires, the main stock index rose 0.7%
ahead of inflation data.
Peru's central bank will announce its rate decision later on
Thursday, and is also expected to hold steady, at 4.50%. The
Peruvian sol rose 0.4%.
Meanwhile, Israel's assets came under pressure as the
regional geopolitical situation appeared to be deteriorating and
as political instability deepened.
The country's five-year credit default swaps rose nine basis
points from Wednesday's close, to reach 107 bps, according to
S&P Global Market Intelligence.
Israel's blue-chip index plummeted 1.6%. Its
100-year bond, which matures in 2120, fell by more than 1 cent
on the dollar.
Key Latin American stock indexes and currencies:
MSCI Emerging Markets 1204.24 -0.39
MSCI LatAm 2284.03 -0.09
Brazil Bovespa 137509.54 0.28
Mexico IPC 57825.01 0.1
Argentina Merval 2186844.1 0.717
7
Chile IPSA 8271.59 -0.58
Colombia COLCAP 1648.38 -0.66
Brazil real 5.5432 -0.13
Mexico peso 18.919 -0.07
Chile peso 930.16 0.38
Colombia peso 4159.5 0.41
Peru sol 3.608 0.39
Argentina peso (interbank) 1184 -0.17
Argentina peso (parallel) 1170 1.71