A.Latina Currencies Fall After U.S. Data Supports Further Monetary Tightening

Most Latin American currencies fell on Friday, dragged lower by U.S. economic data that would support further monetary policy tightening, boosting appetite for the dollar.

* US consumer spending, which accounts for more than two-thirds of the country’s economic activity, rebounded strongly in January amid strong income growth as inflation accelerated.

* Given this, futures traders linked to the Federal Reserve’s key interest rates have increased bets that the US central bank will raise rates at least three more times.

* After the data, the dollar was at a seven-week high.

* “Traders face a challenging investment landscape as they navigate the era of tighter monetary policy,” said a note from Bogotá-based brokerage firm Acciones y Valores.

“Risks surrounding central banks’ continued fight against inflation are compounded by slowing corporate growth and performance, rising geopolitical tensions…and regulatory restrictions in China that certainly increase safe-haven flows into US Treasuries and aggressively interfere with Fed prices,” he added.

* The falls were led by the Chilean peso with 1.64% to 821.90/822.20 units per dollar. At the same time, the flagship index of the Santiago Stock Exchange, the IPSA, rose 0.23% to 5,324.79 points. * In Brazil, the real lost 1.05% to 5.1901 units to the dollar and the Bovespa stock market index lost one percentage point to 106,522.49 points.

* The Mexican peso fell 0.26% to 18.4093 units to the dollar after hitting its best level in five years the day before; and the main S&P/BMV IPC stock index lost 0.83% to 52,646.03 units.

* In Argentina, the peso fell 0.21% to 195.75 units to the dollar, while Argentina’s main S&P Merval index rose 0.76% to 249,881.32 points.

* The Peruvian currency, the sol, depreciated 0.42% to 3.807/3.818 units per dollar. Meanwhile, the benchmark index of the Lima Stock Exchange fell 0.65% to 560.10 points.

* The Colombian peso ran steady at 4,860 units to the dollar, while on the stock market, the benchmark MSCI COLCAP index rose 0.41 percent to 11,197.64 points.