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Latin American currencies were mixed

on Tuesday even as the dollar took a beating with voting in the

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U.S. midterm elections underway, while the Brazilian real was

volatile amid political and fiscal concerns.

The Colombian peso led the upward move with a nearly

3% gain, set to notch its best single-day performance in 17

weeks.

Commodity-linked Chile’s peso and Peru’s sol

gained 1.1% and 0.96%, respectively as copper prices rebounded

as worries about supply and a weaker dollar shrugged off

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concerns over an upsurge of COVID-19 cases in the world’s top

metals consumer China.

Prices of the red metal also got a boost after Chile’s

Codelco, the world’s biggest copper miner, proposed a 33.3%

increased premium for 2023 supplies to Chinese customers.

Meanwhile, inflation in October slowed to its lowest level

in eight months. That could reinforce Chile’s central bank’s

take that its aggressive monetary tightening cycle has come to

an end.

“There is growing evidence that headline inflation pressures

are easing in parts of emerging markets; Chile is now expected

to cut by a whopping 417 bps in 12 months to prevent the economy

from sliding into a recession–today’s huge disinflation surprise

reinforced this view,” Natalia Gurushina, EM fixed income

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economist at VanEck wrote in a note.

Brazil’s real struggled for direction. Fears are

growing of increased fiscal spending by Brazilian

President-elect Luiz Inacio Lula da Silva, Commerzbank analysts

said.

Separately, Brazil’s central bank Monetary Policy Director

stressed that policymakers “have to work” to bring 2024

inflation expectations to the target.

The dollar index edged 0.5% lower. Investors are

betting that Republicans will win control of the House of

Representatives and possibly the Senate, leading to political

gridlock in Washington that could prevent radical policy

changes.

Further, Peru’s finance ministry lowered its economic growth

expectations for 2022 to between 2.7% and 3%, from 3.3% earlier.

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Mexican peso fell 0.5%, snapping a five-day gaining

streak. Inflation is expected to have moderated in October but

remaining well above the country’s central bank target, likely

cementing forecasts of another rate hike on Thursday.

Key Latin American stock indexes and currencies at 1942 GMT:

Stock indexes Latest Daily %

change

MSCI Emerging Markets 900.73 0.38

MSCI LatAm 2305.60 -0.09

Brazil Bovespa 115562.37 0.19

Mexico IPC 50648.83 -0.22

Chile IPSA 5406.12 2.2

Argentina MerVal 147485.63 -0.233

Colombia COLCAP 1239.43 -0.39

Currencies Latest Daily %

change

Brazil real 5.1565 0.01

Mexico peso 19.5401 -0.51

Chile peso 906 1.06

Colombia peso 4969.25 2.71

Peru sol 3.9022 0.96

Argentina peso (interbank) 159.7100 -0.22

Argentina peso (parallel) 287 1.05

(Reporting by Susan Mathew and Ankika Biswas in Bengaluru;

Editing by Paul Simao and Josie Kao)