Chile's peso fell to its weakest level in 19 months on Friday as copper slid and the US rate outlook weighed on emerging market currencies. Other Latin American currencies showed mixed performance, while Mexico stayed in focus on trade.
Chile's peso weakened 0.4% against the dollar to reach its lowest point since April 2025. Latin American currencies showed mixed performance as investors assessed the US interest rate outlook, regional economic data and central bank signals.
Copper slides toward a fifth weekly loss
Chile's 2042 and 2054 dollar bonds each declined about 1 cent, according to Tradeweb data. At the same time, copper, Chile's primary export, fell to a nearly four-month low and was heading toward a fifth consecutive weekly decline.
The metal has benefited from AI-related investment. However, sentiment toward the sector weakened after Nvidia Chief Executive Jensen Huang resigned on Thursday, which added to concerns that spending on data-center infrastructure could slow.
Dollar stays firm on rate expectations
The dollar edged lower on Friday after reaching a 19-month high in the previous session. Stronger-than-expected US inflation data reinforced expectations that the Federal Reserve could raise interest rates again.
Higher US yields tend to draw capital into dollar-denominated assets, which pressures emerging market currencies. Weaker currencies can also fuel imported inflation and limit central banks' room to cut rates.
MSCI's Latin American currency index remained largely unchanged for the day but stayed on track for a third straight weekly decline. The regional equities index rose 0.5%, leaving it broadly flat for the week.
Mexico weighs mixed trade signals
In Mexico, investors assessed mixed signals from Washington on trade. Treasury Secretary Scott Bessent said he expected the US to reach trade deals with Mexico and Canada, a day after President Donald Trump threatened to double tariffs on Mexico over a migrant caravan.
The Mexican peso remained little changed, while the benchmark stock index fell 0.6%, retreating after reaching a record high in the prior session.
Source: Investing.com
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