(Updates prices) By Susan Mathew and Devik Jain Nov 23 (Reuters) – Brazil’s real fell on Wednesday as inevestors worried about the country’s fiscal policy and after President Jair Bolsonaro challenged presidential elections he lost, while a weaker dollar boosted other Latin American currencies. The real lost 0.3%, extending Tuesday’s losses against a weaker dollar in volatile trading after Bolsonaro argued votes from some machines in last election should be “invalidated”. Electoral experts and political analysts said the challenge appears weak on merits but could still fire up supporters who have been protesting Bolsonaro’s loss to leftist rival Luiz Inacio Lula da Silva. Investors also are nervous about the incoming Lula administration’s fiscal plans and uncertain about the cabinet’s composition, concerns that were also reiterated by Brazil’s central bank chief Roberto Campos Neto. Brazilian Senator Marcelo Castro was seen pushing to waive at least 100 billion reais ($19 billion) from a constitutional spending cap next year. “The market’s reaction was subdued – in part because Brazil’s institutions are pretty robust, despite the highly entertaining political landscape and occasional bouts of political noise,” Natalia Gurushina, EM fixed income economist at VanEck said in a note. “The market is absolutely correct in focusing on the cabinet lineup and fiscal debates – these will be key drivers for local assets going forward.” Brazil shares fell 0.2%, weighing on the MSCI LatAm stock index. Most other Latin American currencies rose against the dollar which was last down 0.9% after minutes from the Federal Reserve’s November meeting showed a “substantial majority” of policymakers agreed it would “likely soon be appropriate” to slow the pace of interest rate hikes. “It doesn’t mean that the Fed reaches its terminal rate in December, rather it could be lower for longer path as the Fed assesses the lagged effect of the cumulative rates on the broader economy,” said Quincy Krosby, chief global strategist for LPL Financial. Fears of global recession have rattled markets this year as central banks have hiked rates aggressively to tame inflation. Mexico’s peso rose 0.4% after a Mexican central bank member said the monetary authority s “not ready yet to decouple” from the Fed, and to do so prematurely could weaken the peso currency. Argentina’s economic activity grew 4.8% in September from a year earlier, more-than-expected. Moody’s Investors Service said the debt loads of large Latin American sovereigns will likely stay high, constraining governments’ ability to support economic growth. Elsewhere, Hungary’s forint slumped 1% on worries about access to European Union unds. Key Latin American stock indexes and currencies by 2006 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 934.62 0.78 MSCI LatAm 2164.32 0.2 Brazil Bovespa 108785.33 -0.23 Mexico IPC 52083.08 0.62 Chile IPSA 5260.91 -0.56 Argentina MerVal 159249.26 0.683 Colombia COLCAP 1260.00 0.33 Currencies Latest Daily % change Brazil real 5.3711 -0.03 Mexico peso 19.3465 0.37 Chile peso 915.9 1.10 Colombia peso 4876.47 0.53 Peru sol 3.8459 -0.36 Argentina peso (interbank) 164.8300 -0.19 Argentina peso (parallel) 308 0.00 (Reporting by Susan Mathew and Devik Jain in Bengaluru; Editing by Mark Potter and David Gregorio)
Read More: EMERGING MARKETS-Brazil’s real, stocks fall on fiscal jitters; other Latam FX rise as