Latin American currencies muted as investors assess business activity data

Updated at 1507 GMT

By Johann M Cherian

July 1 (Reuters) –Currencies across most resource-rich Latin American economies were largely unchanged on Monday as investors focused on factory activity surveys out of major economies in the region.

MSCI’s index tracking Latin American currencies .MILA00000CUS slipped 0.5% against the dollar, with markets bracing for key U.S. employment data later this week.

Brazil’s real BRL= ticked up 0.1% as the price of iron ore, the country’s top export, notched a two-week high, while a survey showed manufacturing activity in June stood at 52.5, slightly higher than the 52.1 reading in May. IRN/

However, the currency traded at levels seen two and a half years ago, after notching its largest quarterly loss since the COVID-19 pandemic on Friday.

Mexico’s peso MXN= slipped 0.5%, extending declines in June that also saw the currency notch its biggest quarterly drop since the pandemic. A survey showed business activity in June stood at 51.1, a notch lower than 51.2 in the prior month.

Political uncertainty has dominated investors’ mood, with concerns of fiscal sustainability and central bank independence in Brazil and worries in Mexico that President-elect Claudia Sheinbaum might undertake judicial reforms.

Meanwhile, Chile’s peso CLP= climbed 0.2%. An index tracking domestic economic activity ticked up 1.1% in May on an annual basis, landing below the 2.8% growth expected by economists polled by Reuters.

“The ongoing drag from still-tight financial conditions, and temporary issues in key sectors, have put a lid on the recovery in recent months. Still, the persistent sluggishness of confidence indicators suggests the upturn will remain sub-par by previous standards,” said Andres Abadia, chief Latin America economist at Pantheon Macroeconomics.

Peru’s sol PEN= climbed 0.3% as prices of the red metal were also helped by better-than-expected manufacturing activity data out of top consumer China. MET/L

On the equities front, MSCI’s index tracking local equity indexes .MILA00000PUS edged up 0.1%, though Brazil’s Bovespa .BVSP added 0.7%.

Petrobras PETR4.SA gained nearly 1% after the state-run oil giant raised jet fuel prices to distributors by an average 3.2%.

Mexico’s main stock index .MXX added 0.6%, with Grupo Mexico GMEXICOB.MX jumping 2.1% after a report said miner Southern Copper SCCO.N will likely finish building its Tia Maria copper project in southern Peru in up to two years and then begin production in 2027.

Peruvian equities .SPBLPGPT were flat after data showed consumer price inflation in the South American country accelerated 0.12% in June, bouncing from a 0.09% drop in May.

Elsewhere, Turkish stocks .XU100 lost 2.4% and banks .XBANK dropped more than 3% after the country’s finance minister, Mehmet Simsek, announced measures to modernize the country’s tax system, which included raising corporate tax on public-private partnerships and a possible proposal on stock market gains.

Key Latin American stock indexes and currencies:

Reporting by Johann M Cherian in Bengaluru; Editing by Paul Simao