Most Latam FX rises after data bolsters calls for bigger Fed rate cuts
Updated at 11:00 a.m. ET/ 1500 GMT
Mexican lower house passes controversial judicial reform
Brazil's industrial output falls more than expected in July
Chile cenbank cuts rates by 25-bps overnight
Latam stocks up 1.3%, FX adds 0.2%
By Shashwat Chauhan
Sept 4 (Reuters) -Most Latin American currencies edged up on Wednesday, as the dollar softened after latest U.S.job openings data strengthened bets that the Federal Reserve could opt for a bigger interest rate cut later this month.
Traders added to bets that the Fed will deliver a half-a-percentage-point reduction at its next meeting after data showed U.S. job openings dropped to a 3-1/2-year low in July, suggesting the labor market was losing steam.
"The labor market is definitely cooling significantly after running hot for several years," said Stephen Stanley, chief U.S. economist at Santander U.S. Capital Markets.
"In my view, the compelling question is whether the July readings were somewhat of a downside outlier or are they telling us that labor market conditions are deteriorating at an accelerating pace."
The data comes ahead of Friday's all-important August non-farm payrolls report that could offer more clues on the Federal Reserve's September rate cut plans.
Mexico's peso MXN= gained 0.3%in choppy trading.
In a marathon session, Mexico's lower house of Congress on Wednesday morning approved a controversial judicial reform.
Despite an opposition outcry, ruling party Morena approved the reform, which has led to a strike by judicial workers, strained relations with the U.S. and generated concern in financial markets.
Brazil'sreal BRL= added 0.4%, while Colombia's peso COP= advanced 0.3%.
Government statistics agency IBGE said Brazil's industrial production fell more than expected in July, losing steam after a stellar performance in the previous month.
Chile's peso CLP= was an outlier, down 0.5% after the country's central bank cut its benchmark interest rate by 25 basis points to 5.5%, in line with traders' expectation following a unanimous vote.
The dollar index =USD, which measures the greenback against a basket of major global peers, was last down 0.4%.
MSCI's index for Latin American currencies .MILA00000CUS gained 0.2%, while a gauge for stocks .MILA00000PUS added 1.3%.
Regional heavyweight Brazil's Bovespa stock index .BVSP gained 1.6% after falling for the last four sessions, while Mexico's benchmark .MXX added 0.4%.
A broader gauge for emerging market stocks .MSCIEF fell more than 1% as chips-heavy bourses in Asia clocked steep losses following U.S. firm Nvidia's sharp drop on Tuesday.
Concerns of an economic slowdown in the U.S. also lingered after Institute for Supply Management data released on Tuesday showed U.S. manufacturing remained subdued despite a modest improvement in August from an eight-month low in July.
Elsewhere in emerging markets, the National Bank of Poland (NBP) left its main interest rate on hold at 5.75% as expected. The zloty EURPLN= was last up 0.1% against the euro.
HIGHLIGHTS
** Brazil finance minister says he trusts central bank officials ahead of rate decision
** Colombia's Ecopetrol says operations affected by pipeline attacks, road blockades
** Chile central bank lowers range of 2024 GDP growth forecast
Key Latin American stock indexes and currencies:
Equities | Latest | Daily % change |
MSCI Emerging Markets .MSCIEF | 1075.61 | -1.34 |
MSCI LatAm .MILA00000PUS | 2240.23 | 1.26 |
Brazil Bovespa .BVSP | 136529.64 | 1.62 |
Mexico IPC .MXX | 51942.12 | 0.68 |
Chile IPSA .SPIPSA | 6429.74 | 0.67 |
Argentina Merval .MERV | 1771980.13 | 2.117 |
Colombia COLCAP .COLCAP | 1345.03 | -0.21 |
Currencies | Latest | Daily % change |
Brazil real BRL= | 5.6209 | 0.43 |
Mexico peso MXN= | 19.7165 | 0.34 |
Chile peso CLP= | 933.09 | -0.48 |
Colombia peso COP= | 4171.5 | 0.29 |
Peru sol PEN= | 3.7901 | -0.48 |
Argentina peso (interbank) ARS=RASL | 953.5 | 0.052438385 |
Argentina peso (parallel) ARSB= | 1290 | 1.550387597 |
Reporting by Shashwat Chauhan in Bengaluru
Editing by Marguerita Choy
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