Emerging Markets – Latin American currencies fall to two-month lows as interest rate hike fears fuel dollar rally

* Mexico c. Bank Rate Announcement due at 1PM local time / 1800 GMT * Peru saw interest rates hiked by 50 basis points. * Services activity in Brazil beat expectations with a rise of 1.7% in March. By Anisha Sircar, May 12 (Reuters) – Latin American currencies tumbled on Thursday as the dollar swung to a two-decade high after rising U.S. inflation fueled concerns about big rate hikes amid a slowing global economy, sending investors away from risk. . origins. MSCI’s index of Latin American currencies fell as low as $2,251, the lowest since mid-March, with the Brazilian real down 0.4% even as data showed that Brazilian services activity rose at a record pace in March, marking a solid recovery from COVID-19. deflation. The coin has lost 11% since its peak in late April. “The Brazilian real has not been able to escape the impact of the latest and sharpest wave of dollar appreciation since the last days of April,” said Alex Kuptsikevich, chief market analyst at FxPro. The dollar rose to a two-decade high on concerns about monetary tightening after consumer price index data on Wednesday showed US consumer price growth remained hot, bolstering expectations of further interest rate hikes. “Having started tightening monetary policy more than a year ago, the Central Bank of Brazil is closer to reining in inflation than central banks in many advanced economies. While this does not make for real stability in the face of market headwinds, it appears to be stronger against currencies Others, especially emerging countries, “said Kuptsikevich. The Mexican peso was not left unscathed either, falling 0.2% even though the central bank, the central bank, later on Thursday raised its benchmark interest rate for the eighth time in a row, raising it by 50 basis points to 7%. The Chilean peso fell 0.7% as copper prices fell below $9,000 a tonne for the first time since October. Fears of lower demand amid rising inflation and higher interest rates have put pressure on industrial metals prices. Peru’s Seoul fell 0.5% against the dollar before the interest rate announcement by the country’s central bank, which is also expected to raise rates by 50 basis points. Latin American stocks advanced 0.1%, with Brazil’s Bovespa index up 0.4%, boosted by Banco do Brasil SA after the state-run lender reported that its first-quarter net profit grew 34.6%, beating expectations. Meanwhile, the Czech crown jumped 2%, rebounding from its lowest level in two months on Wednesday as the Czech Central Bank intervened after the currency fell on expectations that interest rate hikes will end. Elsewhere, Sri Lanka appointed a new prime minister, Ranil Wickremesinghe, on Thursday, in a move President Gotabaya Rajapaksa hopes will calm weeks of worsening civil unrest in the country. Major Stock Indices and Currencies in Latin America at 1445 GMT: Latest Stock Indices Daily Change % MSCI Emerging Markets 987.04 -2.39 MSCI LatAm 2199.48 0.18 Brazil Bovespa 104910.80 0.49 Mexico IPC 49181.37 -0.19 Chile IPSA 4713.15 0.77 Argentina MerVal 84974.40 -0.919 Colombia 0.24 Latest Percentage Daily Changes in Brazil 5.1375 0.14 Mexican Peso 20.3373 -0.16 Chilean Peso 868.2 -0.74 Colombian Peso 4094.34 -0.43 Peru Sol 3.805 -0.50 Argentine Peso 117.2400 -0.12 (Interbank) Argentine Peso 201.5 1.74 (Parallel) (Reported by Anisha Sercart In Bengaluru; Editing by Andrea Ricci)