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BRL Falters Amid Political Woes, PEN Shines

LATAM FX
  • USDBRL broke out of its most recent range to the topside, trading back above 5.00 for the first time since June 22, up 1.2%. The new report from Folha de S.Paulo newspaper saying that a member of the health ministry had allegedly asked for a bribe to negotiate the purchase of doses of AstraZeneca through an intermediary company has soured local sentiment. Additionally, anxieties surrounding tax reform has prompted Morgan Stanley to estimate the Brazilian stock market could decline by 4.1% if the tax overhaul proposed by the government is implemented.
  • The Peruvian Sol has extended the 2.3% rally from Monday, gaining another 0.9% today as markets reopened following a local holiday. Optimism still seems evident amid market-friendly gestures from Pedro Castillo, the likely winner of this month's presidential election.

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