EMERGING MARKETS-Dip in dollar buoys Latam FX; Brazilian real leads gains

* Mexico’s economic activity likely to stagnate in September * Brazil’s Lula-Bolsonaro presidential election – poll * Bolivia’s GDP grows 4.1% in the second quarter * Latamian currencies rise 1.2%, stocks up 1.9% By Bansari Mayur Kamdar , Oct 20 (Reuters) – The Brazilian real led gains among Latin American peers on Thursday, helped by a weaker dollar and improved global risk sentiment. The US dollar index, which measures the greenback against a basket of currencies, fell 0.6%, buoying regional currencies. The real gained 1.5% while the Latin American currency index gained 1.2%. So far this year, the real is up 7%, compared to an 8.8% decline in its emerging market peers. “In the case of Brazil, we see some currency resilience, largely at the back of the cushion in terms of monetary policy,” said Wilson Ferrarezi, economist at TS Lombard. Brazil’s presidential race has narrowed to a 4 percentage point gap between leaders Luiz Inacio Lula da Silva and incumbent President Jair Bolsonaro, and they are now statistically level, according to a poll released on Wednesday. “There is a growing consensus that the runoff will be very close, but from a market perspective both candidates have pros and cons and there are some sectors that could benefit more from one than the other and vice versa,” Ferrarezi added . “Overall, Brazilian markets are likely to continue to benefit, likely because inflationary pressures are finally easing.” The oil producer’s Mexican peso rose 0.4% against the dollar, also helped by a rise in crude oil prices in response to tighter supplies and news that China is considering reducing quarantine periods for inbound visitors. According to a preliminary estimate by the national statistics agency, the Mexican economy is likely to stagnate in September after two months of expansion. The currencies of copper producers Chile and Peru appreciated slightly, supported by firm copper prices and a weaker greenback. The Colombian peso was the only Latin American currency in red in early trade, down 0.5%. Equities in the Latam region gained 1.9%. Bolivia’s economy grew 4.1% year-on-year in the second quarter of 2022, the government said on Wednesday, hinting at an increase in output and a normalization of the economy after the coronavirus pandemic. Elsewhere in EM, the Turkish lira briefly hit record lows after the central bank delivered a larger-than-expected 150 basis point rate cut. Key Latin American Stock Indexes and Currencies at 0253 GMT: Stock Indexes Last Daily % Change MSCI Emerging Markets 866.54 0.07 MSCI Latam 2230.95 1.88 Brazil Bovesspa 117156.10 0.76 Mexico IPC 46396.73 0.39 Chile IPSA IPSA 5096.80 0.80 0.18 ARGENTINA MVAL MEGENTINAM. Exchange rate Brazilian real 5.1962 1.47 Mexico peso 20.0319 0.34 Chilean peso 970.9 0.20 Colombian peso 4847.05 -0.27 Peru sol 3.972 -0.01 Argentine peso 153.5000 -0.21 (interbank boat)

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