Latin American currencies and stocks seesawed Monday on thin trading volumes. Several major markets including United States, China and the United Kingdom kept a lid on liquidity due to holidays, driving traders to remain on the sidelines.
Brazil’s ongoing political scandal involving President Michel Temer has led many investors to pull back bets on a sharp 125 basis-point interest rate cut this week. Instead, rate futures suggested a 100 basis-point.
Last week, Brazil traders erred on the side of caution ahead of a key central bank decision after market close on Wednesday and the release of first-quarter gross domestic product (GDP) figures on Thursday.
Key players fear the crisis could hamper the implementation of pension and labor market reforms. The Brazilian real slipped 0.13 percent, while the benchmark Bovespa stock index fell 0.51 percent.
On the other hand, Mexico's peso noted a 0.2 percent rise against the dollar, tracking gains in the price of oil. But, Finance Minister Jose Antonio Meade said the currency could still be subject to volatility in the times ahead as the country gears up to renegotiate the NAFTA trade agreement with the United States and Canada. The Mexican stock index closed down 0.45 percent.
Read more at Reuters.