Latin American currencies plummet on expectations of US rate hikes

Latin American currencies traded with heavy losses on Tuesday after higher-than-expected inflation data in the United States opened the door to a more aggressive monetary policy by the Federal Reserve, which also pushed the dollar higher. global level.

US consumer prices unexpectedly rose in August and core inflation picked up amid rising rent and food costs, prompting the Fed to make a third 75 basis point rate hike next Wednesday.

The dollar index, which measures the greenback against a basket of six major currencies and was headed for its longest losing streak in a year earlier in the day, recovered from an initial low and traded with a gain of just over from 1%.

The losses were led by the Chilean peso, which fell 1.64% to 914.20/914.50 units per dollar. Meanwhile, the leading index of the Santiago Stock Exchange, the IPSA, gained 0.51%, to 5,625.49 points.

The Colombian peso fell 1.42% to 4,415.75 per dollar, while the benchmark COLCAP index rose 0.23% to 1,238.32 units on the Colombian Stock Exchange.

The Brazilian real depreciated 1.41%, to 5.1645 units per dollar, while the Bovespa index of the Sao Paulo B3 stock exchange fell 0.81%, to 112,487.81 points.

The Mexican peso was trading at 20.0660 units per dollar, with a loss of 1.24% compared to the Reuters reference price on Monday, and changed course after the inflation data in the United States, after having started the day with profit.

The main stock index S&P/BMV IPC, which includes the 35 most liquid companies in the Mexican market, fell 0.17% to 47,780.92 units, with investors assimilating the US IPC data.

In Argentina, the peso fell 0.25%, to 142.63 per dollar in depreciation regulated by the central bank, while the Merval stock index rose 0.72%, 145,790.62 units, in the midst of a notorious liquidity cut, which in the opinion of the operators was a consequence of select taking of profits and the decline in foreign markets.

The Peruvian currency, the sol, fell 0.44% to 3.871/3.875 units per dollar. Meanwhile, the benchmark of the Lima Stock Exchange lost 0.86%, to 508.21 points.

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