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USDPEN Snaps Losing Streak

  • The Peruvian Sol snapped a 5-day winning streak on Tuesday as renewed optimism for the USD and soaring yields weighed on emerging market currencies. Despite the pullback in USDPEN, the pair remains roughly 3.5% below the 2021 close.
  • Following Peru's GDP rising 3.5% y/y in Nov, Scotiabank noted non-resource sectors contributed the most to the print while construction brought on a sharp decline. Based on these results, Scotiabank expects GDP growth for Q4 2021 to come in around 3% y/y, and reaffirms its forecast of 2021 GDP growth of 13.3%.
  • High ocean waves stemming from the massive volcanic eruption near Tonga caused an oil spill off the coast of Peru, closing beaches and halting fishing after the country’s Navy failed to issue a tsunami warning.
    • The leak occurred while an oil tanker was discharging crude for the La Pampilla refinery owned by Madrid-based Repsol SA on Saturday. The spill near the seaside city of Ventanilla, near the Peruvian capital, has been contained and cleaning is underway, according to a government statement. (BBG)
    • Peruvian prosecutors opened an investigation on Tuesday into a unit of Spanish energy firm Repsol. (RTRS)

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