EMERGING MARKETS-Mexico’s peso leads Latam FX higher, outpacing peers

* Brazil government set to loosen 2025 fiscal target, source says * Guyana gas-to-power project snag to hit revenue * Chile’s consumer prices rise less than expected * Latam FX up 0.4%, stocks up 1% By Bansari Mayur Kamdar April 8 (Reuters) – Currencies in Latin America outperformed most of their emerging market peers on Monday with Mexico’s peso extending gains, while Israel’s shekel jumped over 2% against the dollar after its central bank held interest rates steady. The peso rose 0.7% to 16.3563 per dollar, hovering near a level not seen since October 2015, with the market awaiting the release of inflation figures in both Mexico and the United States this week. Regional governments, including heavyweight Brazil, rallied around Mexico on Saturday after its embassy in Ecuador was raided to arrest a politician who had been granted asylum by Mexican authorities. Also in focus, investors took measure of Mexico’s presidential hopefuls on Sunday night at a feisty first debate. The MSCI index for Latin American currencies rose 0.4% by 1458 GMT, compared to a 0.1% gain in the broader emerging markets index. The Chilean peso climbed 0.4% against a softer dollar, after posting its best weekly performance since November on Friday. Consumer prices in Chile rose slightly less than expected in March, with the 12-month inflation reading below 4% as the local central bank continues to lower interest rates but is now striking a more hawkish tone. “This is a benign inflation report, highlighting that underlying price pressures are under control after the noise at the start of the year driven by the new methodology,” said Andres Abadia, chief Latam economist at Pantheon Macroeconomics. Also boosting the currency of the top copper producer, prices of the red metal in London hit their highest in more than 14 months, supported by demand from momentum-following funds. The currency of no. 2 copper producer Peru climbed 0.8%, extending gains for its fifth straight session against the dollar, while the Brazilian real rose 0.5% against the dollar. Brazil’s government is expected to loosen its fiscal target for 2025 but keep it in positive territory, a source familiar with the matter told Reuters. Latin American stocks rose 1%, also outpacing the broader emerging markets equities, with Brazil’s Bovespa adding 1.2% on a boost from commodity-linked stocks. Guyana’s efforts to use its natural gas resources to fuel a power plant that would slash its energy costs have snagged on construction delays and threaten to curtail the rising oil hotspot’s revenue this year by about $1 billion. Elsewhere in emerging markets, the Israeli shekel jumped 2% after the Bank of Israel (BoI) held its key interest rate at 4.5% for the second straight meeting after cutting them by a quarter-point in January. HIGHLIGHTS: ** Hong Kong looking at more steps to boost stock market, says Lee ** Egypt’s inflation slows to 33.3% in March ** Philippine central bank keeps rates steady ** Thai PM says central bank should cut rates to help economic revival Key Latin American stock indexes and currencies at 1458 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1049.00 0.31 MSCI LatAm 2555.42 1.02 Brazil Bovespa 128270.22 1.16 Mexico IPC 57953.77 -0.24 Chile IPSA 6594.80 1.27 Argentina MerVal 1226130.65 0.968 Colombia COLCAP 1394.10 0.42 Currencies Latest Daily % change Brazil real 5.0418 0.44 Mexico peso 16.3569 0.57 Chile peso 945.2 0.35 Colombia peso 3767.34 0.00 Peru sol 3.6675 -0.04 Argentina peso 864.0000 -0.12 (interbank) Argentina peso 965 2.07 (parallel) (Reporting by Bansari Mayur Kamdar in Bengaluru; editing by Christina Fincher)

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