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Colombia central bank rate decision on tap
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Mexico economy grows 0.2% in Q1 from previous quarter
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Brazil's job creation outpaces expectations in March
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Argentina lower house approves Milei reform bill
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Latam FX down 0.8%, stocks shed 1.4%
By Bansari Mayur Kamdar
April 30 (Reuters) - Stocks and currencies in Latin
America fell on Tuesday, with both indexes headed for monthly
losses as investors reassessed the Federal Reserve's interest
rate easing path and geopolitical tensions drove a rush to
safe-haven assets.
The MSCI index for Latin American currencies
fell 0.8% and was on track for its worst monthly performance in
eight months, while regional stocks shed 1.4% by
1442 GMT.
Weighing on emerging market currencies, investors have
continually had to dial back expectations for the timing and
magnitude of U.S. rate cuts this year after hotter-than-expected
inflation reports.
"The pressures working against EM currencies are relentless,
as the Fed pulls back from its pivot late last year and the USD
proves resilient," said Paul Mackel, global head of FX research
at HSBC.
"It does not help that several EM central banks are cutting
their policy rates. Doubts have been lingering for some time
that this could play out too fast, calling their actions into
question. "
The dollar index rose 0.3%, with all eyes now on the
Fed's rate decision on Wednesday, when it is expected to keep
borrowing costs unchanged.
The Mexican peso slipped 0.3% against a firm dollar
after data showed the South American country's economy posted
better-than-expected first-quarter growth versus the previous
three months.
Brazil's real, Chile's peso and Colombia's
peso shed nearly 1% each against the strengthening
dollar.
Investors awaited an interest rate decision by the Colombian
central bank later in the day when it is expected to cut
borrowing costs by 50 basis points.
On the economic data front, Brazil's creation of formal jobs
in March significantly outpaced expectations, while Chile's
unemployment rate rose to 8.7% in the quarter through March as
expected.
Manufacturing production in Chile fell 2.1% in March on a
yearly basis, the country's INE statistics agency said, well
below the growth of 4.7% expected, while the Andean nation's
copper output was flat.
Bucking regional weakness, Argentina's MerVal jumped
3.2% to hit a record high after its lower house of Congress
approved a sweeping economic reform plan proposed by President
Javier Milei in an overall vote.
More broadly, emerging market stocks were set to end their
third month higher supported by recovery in China stocks, while
emerging market currencies were set for a
monthly decline.
Local currency emerging market bonds have lost investors
2.2% this month.
Key Latin American stock indexes and currencies at 1442 GMT:
rtrs Latest Daily % change
MSCI Emerging Markets 1046.72 -0.44
MSCI LatAm 2453.27 -1.42
Brazil Bovespa 126458.27 -0.7
Mexico IPC 57720.40 -0.19
Chile IPSA 6503.24 -0.72
Argentina MerVal 1349835.3 3.193
8
Colombia COLCAP 1379.21 -0.13
Currencies Latest Daily % change
Brazil real 5.1754 -1.18
Mexico peso 17.0553 -0.31
Chile peso 954.1 -1.32
Colombia peso 3895.53 -1.01
Peru sol 3.75 -0.85
Argentina peso (interbank) 876.5000 0.06
Argentina peso (parallel) 1020 2.45