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Crosswinds from US, Argentina Prompting Broad Losses Across Latam FX

LATAM FX

The USD's rally through the cash equity open, twinned with the devaluation of the ARS to 350/USD has put Latam currencies on the backfoot through the Monday open.

  • USD/CLP opened higher and is maintaining early gains, touching 869.17 and the best levels since December last year. The swaps curve sits slightly higher, moving in sympathy with US markets and the break out in the 10y yield - with US markets likely the key driver here, rather than the BCCh minutes. The minutes themselves continue to detail expectations of rates between 7.75-8.00% by year-end, inline with expectations.
  • USD/BRL has rallied through last week's highs as well as the 100-dma resistance - last crossed in March - to trade the best levels since early June.
  • USD/MXN has retraced the Friday move lower, and now eyes 17.1427 - however the 50-dma remains an anchor for the pair having traded either side of the level for eight consecutive sessions.

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