(Updated at 1530 GMT)
*
Brazil inflation rises in July
*
Mexican peso rises after rate cut, Peruvian sol falls
*
Argentina's Merval leads weekly gains in Latam
*
Ukraine begins formal approval process for bond
restructuring
By Lisa Pauline Mattackal
Aug 9 (Reuters) - Latin American stocks and currencies
climbed on Friday, continuing a strong day for emerging markets
as easing worries about U.S. economic growth helped risk assets
regain some ground, while Brazil's real led regional currency
gains after higher-than-expected inflation figures.
MSCI's Latin American stocks index leapt
2.2% on the day, while the regional currency index
gained 1.6%.
The indexes were heading for 5% and 3.2% gains for the week,
respectively. The share index is on track for its best week
since October 2023, and the currency index for its best since
March 2023, erasing losses from a steep selloff earlier in the
week.
Both have outperformed the broader emerging markets stocks
and currency indexes, both also on
course for weekly gains.
Brazil's real jumped 0.8% to a three-week high against the
dollar, leading regional currency gains after data showed
consumer prices rose 0.38% in July, accelerating from 0.21% in
June and exceeding economists' forecasts.
Brazil's central bank minutes released earlier in the week
showed policymakers are prepared to hike interest rates again if
inflation worsens.
Mexico's peso rose 0.2% against the dollar after its
central bank cut interest rates on Thursday but signaled it
expected higher inflation.
"The balance of risks did not change. We continue to
forecast three additional 25bp rate cuts until the end of 2024,"
economists at Goldman Sachs wrote in a note.
Mexico's peso was among the worst-hit currencies during a
turbulent week that followed a global selloff on Monday in
response to some poor U.S. economic data that deepened worries
about slowing global growth and sparked a massive unwinding of
yen-funded carry trades.
U.S. jobless claims data on Thursday helped risk assets
recover, while stronger China inflation data also helped soothe
worries about deflation in the world's second largest economy.
However, Peru's sol lagged regional peers, losing
0.4% after an unexpected interest rate cut on Thursday.
Meanwhile, the Russian rouble weakened over 2.3% against the
dollar, according to LSEG data, touching a near one-month
low.
"Escalating fighting between Russian and Ukrainian troops in
Russia's Kursk region are most likely the source of selling
pressure on the rouble," said Piotr Matys, senior currency
analyst at InTouch Capital Markets.
Elsewhere, Ukraine began the formal creditor approval
process of its offer to restructure its roughly $20 billion of
international bonds.
The Israeli shekel firmed against the dollar to its
strongest in over a week, with the dollar losing 1.4% against
the Israeli currency.
Emerging market equities have seen inflows of $2.3 billion
over the past 10 weeks, according to data from Bank of America
Global Research. However, EM debt has seen outflows for the past
two weeks.
Key Latin American stock indexes and currencies
MSCI Emerging Markets 1063.31 1.62
MSCI LatAm 2238.75 2.24
Brazil Bovespa 129695.43 0.8
Mexico IPC 52891.87 0.03
Chile IPSA 6330.85 0.59
Argentina Merval 1557735.6 1.788
7
Colombia COLCAP 1309.72 0.81
Currencies Latest Daily %
change
Brazil real 5.5064 0.77
Mexico peso 18.824 0.19
Chile peso 931.81 0.36
Colombia peso 4066.88 -0.2
Peru sol 3.722 -0.35
Argentina peso (interbank) 936.5 0
Argentina peso (parallel) 1345 2.2304832
71