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Bloomberg Dollar Index Sees Sharp Reversal

  • Despite the near 0.4% rally in the Bloomberg dollar index following the US CPI figures, the index has entirely reversed these gains, turning negative for the session.
  • Latam currencies took the data in their stride and are now extending recent strength/resilience, aided by the dollar turnaround and the bounce in equity benchmarks from the lows.
  • Focus for USDMXN is 20.2787, with desks reporting strong MXN demand throughout the week as we approach the Banxico decision/statement later today.
  • USDBRL is through 5.2230 and will next focus on 5.1163, the late August low before 5.0416. USDCLP is in close proximity to 793.46, the Jan 27 low and bear trigger.
  • Below gives key levels of LatAm markets in current trade:
    • USDMXN down 0.35% at 20.4021
    • USDBRL down 0.89% at 5.1891
    • USDCLP down 1.71% at 799.02
    • USDCOP down 0.8% at 3908.38
    • USDPEN down 1.07% at 3.7673
    • BBG Dollar Index down 0.09% at 1173.12
    • JPMorgan EM Ccy Index up 0.42% at 53.816
    • BBG Commodity Index up 0.8213 points (0.75%) at 110.5877
    • WTI Crude Oil (front-month) up $1.37 (1.53%) at $91.02
    • Copper Futures up 8.85 (1.92%) at 469.05

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