Forex- U.S. Dollar Inches Up; Chilean Peso Tumbles 

Investing.com – The U.S. dollar was slightly higher on Tuesday, but traders remained cautious as they waited for an update on a trade deal with China from U.S. President Donald Trump.

Trump is expected to speak at 12:00 PM ET (1700 GMT) at the Economic Club in New York. The possibility of a deal has helped Wall Street reach record highs, but optimism died down after Trump indicated over the weekend he would only sign if it was the “right deal” for America.

The , which measures the greenback’s strength against a basket of six major currencies, rose 0.2% to 98.180 as of 10:11 AM ET.

The safe haven Japanese yen was higher with down 0.2% to 109.08.

Chile’s peso fell to a historic low as protests that have left 20 dead continued. The dollar rose through 800 pesos for the first time ever, touching an all-time high of 800.15 before retreating slightly to 787.25, still up 3.8% on the day.

Elsewhere, sterling was flat as investors wait for the Dec. 12 election. fell 0.1% to 1.2842. The pound had surged on Monday after Brexit Party head Nigel Farage said his party won’t contest any seats currently held by the Conservative Party, increasing the chance that Prime Minister Boris Johnson’s EU withdrawal agreement is secured. The euro fell against the dollar, with down 0.2% to 1.1014, after the European Central Bank’s vice-president Luis de Guindos warned that the negative side-effects of its negative interest rate policy are becoming increasingly apparent.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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Argentine markets stabilize after political uncertainty smashes bonds, peso

© Reuters. FILE PHOTO: Argentine one hundred peso bills sit underneath United States one hundred dollar bill in this picture illustration © Reuters. FILE PHOTO: Argentine one hundred peso bills sit underneath United States one hundred dollar bill in this picture illustration

By Hugh Bronstein and Jorge Otaola

BUENOS AIRES (Reuters) – Argentina’s peso strengthened on Friday as bargain hunters stepped in to push asset prices higher following weeks of tumult touched off by the landslide win of populist-leaning presidential candidate Alberto Fernandez in the Aug. 11 primary.

The local currency gained 0.2% to 55.92 per U.S. dollar, over the counter bonds were up an average 2% , risk spreads tightened and the Merval stock index () rose 3.5%.

The peso had strengthened more than 6% through Thursday, but remained 19.2% weaker since last month’s primary vote showed that Fernandez is likely to be elected Argentina’s next leader.

“Current pricing already includes a fair amount of the risks involved,” said Alberto Bernal, chief emerging markets strategist at XP Investments in New York.

Business-friendly incumbent Mauricio Macri is trailing in his bid for a second term in the Oct. 27 general election. Fernandez laid out his populist credentials during a visit to Madrid on Thursday, saying local Argentine interests would trump those of creditors and energy investors.

As distressed debt specialists rushed to buy discounted Argentine paper, Fernandez’s economic adviser, Guillermo Nielsen, has held conference calls with the country’s foreign creditors over the past week, investors said. Nielsen was the country’s chief debt negotiator following a default in 2002.

Argentina’s over-the-counter sovereign bonds fell an average 39.4% in August before bargain hunters stepped in this week, pushing prices 7.5% higher on Wednesday and Thursday alone.

Macri, who came to power in 2015 as a free-market champion and critic of interventionist policy, was forced to roll out plans to delay payments on around $ 100 billion of debt amid default fears and impose currency controls.

Those have stabilized markets, but the economic outlook has dimmed. Economists polled by the central bank raised their inflation forecast for the year to 55% and cut their outlook for the economy, expecting it to shrink 2.5%.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Argentine peso falls again, central bank sells $170 million

2/2 © Reuters. FILE PHOTO: A man shows Argentine pesos outside a bank in Buenos Aires' financial district © Reuters. FILE PHOTO: A man shows Argentine pesos outside a bank in Buenos Aires’ financial district 2/2

By Walter Bianchi and Jorge Otaola

BUENOS AIRES (Reuters) – Argentina’s peso currency traded 2.85% weaker at 57.95 per U.S. dollar on Wednesday, cutting what had been steeper losses early in the day as the central bank sold $ 170 million of its reserves in three interventions aimed at controlling the peso’s fall.

Worries about Argentina’s ability to meet its dollar-denominated debt obligations have increased since the peso got trounced by political uncertainty after an Aug. 11 primary election. The peso has lost 21.78% of its value against the U.S. dollar since Aug. 12.

The central bank issued a press release saying it would limit financing in pesos for major exporters, a move aimed at strengthening the local currency by encouraging companies to sell dollars in order to obtain pesos needed to fund operations.

Country risk 11EMJ> rose 136 basis points to 2,126, its highest level in 14 years, according to the JP Morgan Emerging Markets Bond Index Plus.

Argentina’s central bank sold $ 50 million of its reserves in its first dollar auction of the day at an average 58.833 pesos per dollar, as part of its effort to control the peso’s fall.

Minutes later the bank sold $ 65 million more of its reserves at an average 58.7269 pesos per dollar, traders said. The bank quickly followed up with a third auction, selling $ 55 million at an average 58.2354.

On Tuesday, the bank exceeded for the first time a guideline on reserve sales agreed as part of its $ 57 billion standby deal with the International Monetary Fund, selling $ 302 million in the foreign exchange market.

The agreement with the IMF limits Argentina’s central bank to $ 250 million in reserve sales daily, set when the exchange rate was above 51.5 pesos per dollar, with the option to intervene further to “counteract episodes of excessive volatility.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Argentina new economy chief will not allow ‘irrational’ run on peso

By Hugh Bronstein and Hernan Nessi

BUENOS AIRES (Reuters) – Argentina will not allow a chaotic fall in the peso and will use its dollar reserves to bolster the currency against political uncertainty that has swept the country since the Aug. 11 primary election, Treasury Minister Hernan Lacunza said on Wednesday.

The peso opened 0.47% weaker at 55 to the U.S. dollar and the country’s risk spread was 8 basis points tighter at 1,855 over safe-haven U.S. treasury bonds , reflecting a calming of recent market jitters.

“We will not allow an irrational run on the currency. That’s why we have international reserves,” Lacunza told local radio station Mitre in an early morning interview, less than 24 hours after being sworn in as treasury chief.

Later on Wednesday, Lacunza was scheduled to meet with economic advisors to center-left presidential candidate Alberto Fernandez, who crushed business-friendly incumbent Mauricio Macri in the presidential primary vote. The primary result sent the peso spiraling down 18% last week.

“Since the market pays as much attention to the future as it does to the present, in addition to what the government in charge can do, it also matters what the other candidates and their economic teams say, to generate certainty towards the future,” Lacunza said, when asked about the meeting with the Fernandez team scheduled for later in the day.

Fernandez is now the clear front-runner ahead of the Oct. 27 presidential election. Macri has enacted a series of emergency economic measures, including cuts in food and personal income taxes, aimed at helping families stung by Argentina’s recession and 55% inflation rate.

Nicolas Dujovne, the former treasury minister, quit on Saturday, saying he believed the country needed “significant renewal” of its economic team.

The currency stabilized on Tuesday, after the central bank poured $ 112 million of its reserves into dollar auctions.

Including last week’s interventions, the bank had auctioned off $ 615 million in dollar reserves as of Tuesday afternoon, traders said.

Lacunza said Argentina would hit its target of erasing the country’s primary fiscal deficit this year, under a $ 57 billion standby financing pact signed in 2018 with the International Monetary Fund. Macri negotiated the pact to halt a run on the peso last year.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Forex – Argentinian Peso Collapse Sends Shockwaves Through Markets

© Reuters.  © Reuters.

Investing.com – The dollar surged against higher-yielding currencies on Monday as a plummeting sent shockwaves through emerging markets.

The dollar rose by more than one-third against the peso after a weekend primary for presidential elections in the G20 member later this year showed incumbent Mauricio Macri far behind his biggest rival, the populist Alberto Fernandez.

Fernandez’ running mate is former president Cristina Fernandez de Kirchner, from whom Macri took over as President in 2015. Fernandez is viewed with suspicion by many investors, who remember the capital controls, high inflation and chronic economic problems of de Kirchner’s last administration.

The shock also weakened of other emerging currencies perceived as vulnerable, especially at a time of slowing global growth. The dollar rose by 1.3% against the and by 1.0% against the . Further afield, it also rose by 1.2% against the {{|Turkish lira}} and by 0.5% each against the and .

By 11:20 AM ET (1520 GMT), the peso had recouped some of its losses to trade at 53.50 to the dollar, compared to a rate of 45.25 before the poll.

Macri now faces little choice but to reinstate capital controls, abandoning one of the biggest achievements of his presidency, analysts said.

The peso’s collapse “makes things worse for Macri, as peso stability (was) supposed to arrest political costs of his IMF-supported austerity,” Daniela Gabor, a professor of economics at the University of the West of England, said via Twitter. “Difficult to see how Macri can hold onto power while inflicting such high social costs.”

ARG peso collapse makes things worse for Macri, as peso stability supposed to arrest political costs of his IMF-supported austerity.

ARG peso collapse makes things worse for Macri, as peso stability supposed to arrest political costs of his IMF-supported austerity.

makes things worse for Macri, as peso stability supposed to arrest political costs of his IMF-supported austerity.

Emerging market currencies have been caught this year between slowing global demand for the commodities they export, which puts downward pressure on them, and the promise of lower dollar interest rates, which relieves that pressure. While they have mostly held their own against the dollar so far this year, the Argentinian peso, ruble and lira have all been pulled lower in recent weeks by a weakening .

The yuan was fixed at a new 11-year low against the dollar by the Chinese central bank on Monday, allowing the mainland and offshore rates to weaken a little more.

The , which is seen as a safe haven in times of market turmoil, rose to a new 15-month high of 105.05 before retreating a little to 105.31, a gain of 0.3% on the day.

The , which measures the greenback’s strength against a basket of six major currencies, fell 0.1% to 97.192.

The euro, meanwhile, rose a little as Italy’s political parties tried to stop a push for snap elections that opinion polls suggest would hand power to the populist right-wing Lega party of Matteo Salvini. rose 0.2% to 1.1218. rebounded 0.5% to 1.2092.

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Mexican peso jumps on U.S.-Mexico deal, yuan dips to 2019 lows

© Reuters. FILE PHOTO: Bundles of Mexican Peso banknotes are pictured at a currency exchange shop in Ciudad Juarez © Reuters. FILE PHOTO: Bundles of Mexican Peso banknotes are pictured at a currency exchange shop in Ciudad Juarez

By Daniel Leussink

TOKYO (Reuters) – The Mexican peso jumped against the dollar on Monday after the United States and Mexico struck a migration deal late last week to avert a tariff war, providing some much-needed relief to fragile market sentiment.

Over the past year, trade disputes between the United States and its trading partners, including a long-running conflict with China, have slowed global growth and unsettled financial markets.

China’s exports unexpectedly returned to growth in May despite higher U.S. tariffs, data showed on Monday, but many suspected the rise was due to firms front-loading shipments to avoid higher U.S. tariffs. Fears of a longer U.S.-China trade war continued to persist.

The figures showed imports in May dropped 8.5% from a year earlier, a much worse than expected outcome that signaled weak domestic consumption and weighed on the yuan.

The Mexican peso rose 2% to 19.2275 pesos per dollar after trading resumed for the first time after Mexico agreed on Friday to expand along the entire border a program that sends migrants seeking asylum in the United States to Mexico.

U.S. President Donald Trump had threatened to impose 5% import tariffs on all Mexican goods starting on Monday if Mexico did not commit to do more to tighten its borders.

“We all knew that Donald Trump was unpredictable, but this was taking it to a whole new level,” said Chris Weston, Melbourne-based head of research at foreign exchange brokerage Pepperstone.

“This was political, it was social. It meant that financial markets had to wear a higher risk premium.”

Futures for the were last up 0.2%. Benchmark 10-year Treasury yields jumped back 3 basis points to 2.114% after hitting a 21-month low of 2.053% on Friday after soft U.S. jobs data.

Against the safe-haven yen, the dollar gained 0.25% to 108.475 yen. The yen gained in late May on the deteriorating global trade outlook as the currency tends to benefit during geopolitical or financial stress as Japan is the world’s biggest creditor nation.

Bart Wakabayashi, Tokyo branch manager at State Street (NYSE:) Bank, said the lift to sentiment from the U.S.-Mexico deal would “probably spill over to optimism with China and hopefully some progress there.”

“We’ve had trade talks with the EU, with Japan. Hopefully these will start to turn to the positive narrative which should see further dollar weakness in the yen,” he said.

Still, the dollar’s gains were checked by rising expectations the Federal Reserve will cut interest rates during the second half of the year.

Those views were bolstered on Friday when data showed nonfarm payrolls increased by 75,000 jobs last month, much smaller than the 185,000 additions estimated by economists in a Reuters poll, suggesting the loss of momentum in economic activity was spreading to the labor market.

Fed funds rate futures are still pricing in more than two 25-basis-point rate hikes by the end of this year even after their retreat early on Monday after the U.S.-Mexico migration deal.

“The market is saying it is not a question of if, it is a question of when, and to what extent, we’re going to get a rate cut for this year,” said Pepperstone’s Weston.

Against a basket of six peers, the dollar rose 0.2% to 96.750, recovering slightly after ending with a 1.2% loss last week, its worst weekly performance since the week of Feb. 16, 2018.

Group of 20 finance leaders said on Sunday that trade and geopolitical tensions have “intensified”, raising risks to improving global growth, but they stopped short of calling for a resolution of the deepening U.S.-China trade conflict.

Elsewhere, the was last down about 0.3% at 6.9336 per dollar in onshore trade after briefly brushing its lowest since late November in the wake of the weak import data.

The Australian dollar slipped 0.4% to $ 0.6973, giving up some of last week’s gains, when it rose 0.9%.

The euro dipped nearly 0.2% to $ 1.1313, retreating from an 11-week high of $ 1.1348 touched on Friday.

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Forex – U.S. Dollar, Mexican Peso Fall on Trump Tariff Threat

© Reuters.  © Reuters.

Investing.com – The U.S. dollar fell, while the Mexican peso continued to slump, after U.S. President Donald Trump threatened to impose a 5% tariff on all Mexican goods if Mexico did not crack down on migration.

The , which measures the greenback’s strength against a basket of six major currencies, lost 0.4% to 97.667 by 10:41 AM ET (14:41 GMT), while jumped 2.7% to a nearly five-month high of 19.6689.

Trump said via Twitter that he will impose the tariff on June 10 and that it will last and increase until illegal immigration is stopped.

Meanwhile, the greenback was also held back by data showing a rise in inflation, supporting the case for the Federal Reserve to keep interest rates unchanged.

The (PCE) price index increased 0.3% last month, the biggest gain since January 2018. The core PCE rose 0.2%. Separate data showed that consumer spending is slowing after a temporary boost during the first quarter.

The dollar was lower against the safe-haven Japanese yen, with falling 0.9% to 108.61

Elsewhere, the euro surged on the weaker dollar, with up 0.4% to 1.1173, while cable rose 0.2% with at 1.2630

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Argentine peso ends rollercoaster week with record low close

© Reuters. FILE PHOTO: A man shows Argentine pesos outside a bank in Buenos Aires' financial district © Reuters. FILE PHOTO: A man shows Argentine pesos outside a bank in Buenos Aires’ financial district

By Walter Bianchi and Adam Jourdan

BUENOS AIRES (Reuters) – Argentina’s peso fell back on Friday afternoon to post a record low close, giving up earlier gains after a tumultuous week that saw the currency battered to its weakest ever level and local debt pummeled as anxious investors fled.

The peso closed at 45.95 to the dollar, traders told Reuters, down around 1.85 percent on the day though still up on Thursday’s intraday low of 46.5. Markets had been somewhat salved by official interventions in the market and higher interest rates on short-term “Leliq” notes, they said.

Argentine bonds and the peso have been hammered this week as uncertainty over a biting recession and high inflation frayed investor nerves about political upheaval in Latin America’s No. 3 economy ahead of elections in October.

“Investors will remain worried until you see the elections happen. Unfortunately that’s a recipe for further volatility,” said Ilya Gofshteyn, New York-based senior emerging markets strategist at Standard Chartered (LON:) Bank.

He said President Mauricio Macri still had a decent chance of re-election, the country was in better shape than in the past to counter the crisis, and that inflation should gradually slow. However, investors would demand high returns to stay in the market given the risks, he added.

The yield of Argentine government bonds due in 2021 have shot up above 18 percent and credit default swaps (CDS) of Argentine five-year debt rose to 1,229.25 points, a reflection of a rising chance of default.

The turmoil has raised the heat on Macri after a week in which domestic media ran blanket coverage about a renewed crisis, threatening to derail his plans for re-election and bolstering his political rivals.

The recession-hit country spiraled into a currency crisis last year that forced Macri to take a $ 56 billion credit line from the International Monetary Fund. In 2018 the peso lost half its value against the dollar and inflation was close to 50 percent.

The peso fell 2.48 percent on Thursday after a 3.53 percent slide the day before. It was down 8.81 percent for the week.

Most economists said the market turmoil had been linked to a poll earlier in the week that suggested Macri’s arch rival, populist ex-President Cristina Fernandez de Kirchner, could beat the pro-market leader in an election run-off.

MACRI VS MARKET

Macri defended the government’s economic reforms on Thursday, saying they had established an independent central bank and a balanced budget. He added change took time and volatility was to be expected.

“The markets are different, they are types who are behind a computer in a faraway place, who buy, sell and have a short-term, opportunistic vision,” he said in comments made to local radio and circulated by his office.

“There is a huge majority of Argentines who do not want to go backwards and who want to go into the future.”

Macri’s fortunes are likely to rest on what happens in the economy in coming months, including whether he is successful in bringing down inflation that was 4.7 percent in March and is running at a 12-month rate of close to 55 percent – driving investors out of the peso.

Morgan Stanley (NYSE:) said in a research note it thought the market price of the peso was “too pessimistic,” but it preferred to “wait on the sidelines” given the stubbornly high inflation and hard-to-call election race.

That may leave little upside for the peso.

“With inflation continuing to rise and the domestic economy still suffering it is hard to paint a picture where ARS (Argentine peso) rallies significantly,” Rabobank strategist Christian Lawrence said in written comments.

“The elections are of course key but there are concerns that Macri is essentially trying to fight ‘kirch with kirch’ by adopting populist policies in an attempt to woo voters tempted to return to the days of pre-Macri.”

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