Most Latin American currencies fall as China's economic crisis hits markets

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May 16 - Most Latin American currencies fell as weak data from China, a top trading partner for most economies in the region, sapped risk appetite. Losses in Peru's sol were marginal, limited by data showing Peru's economy grew 23.45% in June, its fourth consecutive month of growth, as construction, manufacturing and trade surged back from low points last year. Meanwhile, ceilings on public spending and debt have been restored after lifting them during the pandemic, government said over the weekend. From 2022, Peru's deficit will not exceed 3.7% of GDP and the country's public debt should not exceed 38% of GDP, the ministry said. Chile's currency led losses in the region as prices of top export item, copper, slumped on demand fears after data showed China's economy may be slowing. MET L Mexico's peso strengthened the gloom, blowing 0.1%. The peso, a carry trade favourite, is up 0.2% so far this month in what could be its sixth straight month of gains and the longest such streak since 2008. Carry Trading is where investors invest in a high-flowing currency to borrow in low-yielding assets. A hawkish U.S. Federal Reserve and a dovish Mexican central bank have helped keep interest rate differentials attractive, keeping the peso well bid. We think the pace of regional recovery will beat most analysts' expectations in the coming years. With inflation rising, further monetary tightening lies in store, economists at Capital Economics said, but added that political risks could be headwinds. Bovespa hit a three-month low among stocks in Brazil. In the lower weight of the steel sector, Petrobras was biggest, down 1.2%, while the oil and energy major Vale tracked crude prices down. O R Travel Operator CVC slid 6.6% after reporting a loss of 175.6 million reais. Chile's IPSA index also lost 1.3%, breaking a four-day winning streak. On Friday in Mexico City, representatives of the opposition and the government began a round of talks in Venezuela aimed at overcoming Venezuela's acute economic and political crisis that has caused millions to flee the Latin American nation. Markets in Argentina and Colombia were closed for local holidays.