EMERGING MARKETS-Chilean peso hits record low as copper slides, mine workers protest

* Chile’s Codelco resumes operation despite strike * Czech c.bank raises rates by 125-bps (Updates prices) By Shreyashi Sanyal and Susan Mathew June 22 (Reuters) – Chile’s peso hit a record low on Wednesday, underperforming most Latin American peers, as copper prices plunged on growth dreams, and as a workers’ strike at the Codelco mine raised fears about a hit to the country’s production of the red metal. The peso was last down 1.5%, having touched an all-time low of 890.70 per dollar. Codelco, the world’s largest copper producer, has resumed operations despite the strike, the government said, seeking to dispel concerns over an impact on operations. Meanwhile, copper prices slumped to their lowest level in over a year on demands as fears rise that rapid interest rate hikes would topple the global economy into recession as China grapples with COVID-19 lockdowns. US Federal Reserve Chair Jerome Powell reiterated on Wednesday that the central bank is “strongly committed” to controlling inflation. A Reuters poll suggested the Fed is set to increase by 75 basis points again in July, followed by a 50bps hike. “Powell’s remarks, while hawkish, didn’t alter the outlook for continued rate hikes into next year and kept the door open to rate cuts by 2024,” said Joe Manimbo, senior market analyst, Western Union Business Solutions, Washington. The dollar fell, helping some gains in Latam currencies. Peru’s sol and the Colombian peso rose around 0.1% each, while the Mexican peso firmed 0.6% ahead of another likely interest rate hike by its central bank on Thursday. In Czech Republic, the central bank raised its main interest rate by 125 basis points to 7.00%, extending a year-long tightening policy drive to battle inflation. More central bank action is due through the week, with Egypt’s and Philippines seen raising rates, while Indonesia and Turkey are likely seen holding rates. While rate hikes in keeping emerging market currencies competitive for carry trades, fears that tightening by major central banks of the world will cause a global recession and hurt flows into risky assets, have hit sentiment off late. Brazil’s real weakened 0.2%, giving back a chunk of the previous session’s gains. Prices of iron ore, a significant export revenue item for Brazil, fell to 16-week lows on oversupply worries. But while most other regional stock indices fell, Sao Paulo shares erased session losses to rise 0.2%. Brazilian banks gained, with BTG Pactual up 6% after Itau BBA was upbeat about BTG’s earnings, helping counter losses in heavy weight iron ore miner Vale. Key Latin American stock indexes and currencies at 1916 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 994.16 -2.24 MSCI LatAm 2088.24 -0.71 Brazil Bovespa 99893.48 0.21 Mexico IPC 47472.88 -1.31 Chile IPSA 5080.21 -0.09 Argentina MerVal 86129.58 -0.481.29 Colombia COLCAP -0.65 Currencies Latest Daily % change Brazil real 5.1641 -0.22 Mexico peso 20.0000 0.58 Chile peso 888.4 -0.71 Colombia peso 4014.88 -0.10 Peru sol 3.7162 -0.19 Argentina peso 123.8500 -0.14 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Angus MacSwan and Richard Chang)

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