Mexico's peso falls as oil prices drop

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BlackRock bullish on EM Latam stocks, comes off two-month high Mexican peso breaks six-day winning streak By Morgan Stanley and Susan Mathew April 20- Most Latin American currencies fell on Tuesday as the dollar strengthened from lows with falling oil prices knocking currencies in Colombia and Mexico. The Chilean peso meanwhile rose 0.5% to a more than three-month high. Copper prices remained, but retreated on optimism over global demand to 10 year highs. However, Peru's Sol, world no 2 copper exporter, gave up session gains to trade 0.6% lower as concerns about the presidential election remained. It extended its losses on Monday after posting its worst session in more than five months, when the first opinion poll ahead of a presidential run-off election in June indicated a win for socialist candidate Pedro Castillo. Stocks in Peru sank 5% to touch their lowest since November. As the oil prices fell on demand concerns, Colombia's peso lost 0.5%. The peso of Mexico dropped 0.7% after six straight days of gains that took it to three-month highs. Analysts say the currency has prime conditions for carry trades along with the EM peer South Africa's rand. However, sentiment toward emerging market assets has improved, with major investment bank Morgan Stanley bullish on currencies and bonds, citing stability in U.S. yields. BlackRock, the world's largest asset manager, promoted a similar stance on Monday. But in the region, the markets of Latam have deferred due to a damaging COVID 19 resurgence. Brazilians real losses depressed the day's gains, falling 0.1%. Amid fiscal worries, the 2021 budget was sent to President Jair Bolsonaro for approval after an initial delay. The rapid spread of COVID 19 in the country has dulled its economic outlook, with the government ramping up expenditure to what has been perceived as unsustainable levels to offset the pandemic's economic impact. The gradual economic recovery continued in February, but the resurgence of the pandemic in March reversed this trend, wrote analysts at TS Lombard in a note. Activity data for retail sales and the services sectors showed some resiliency in February, but there is little doubt that this trend was reversed by the virus resurgence in March. They expect the real central bank to hike interest rates in the first half of the year- a move which could support the Brazilian economy. In line with regional stocks, Latin American equities retreated, with the MSCI's index of global stocks showing a two-month high. Latin American stock indexes and currencies: Stock indexes Recent Daily change MSCI Emerging Markets 1344.90- 0.27 Argentina IPC 4925.68 0.93 Chile MerVal 46800.75 -- 2.552 Colombia COLCAP 1305.93- 0.49 Peru sol 3.6897- 0.49 Argentina peso 92.9700- 0.04 Mexico Peso 19.9540 -- 0.71 Colombia

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