* Latin American currencies at highest since November 2014 * Brazil’s retail sales rise 3.8% in January, beat forecasts * Latam FX and stocks up 1.2% each By Shashwat Chauhan and Bansari Mayur Kamdar April 12 (Reuters) – Latin American currencies touched their highest level since 2014 on Wednesday, as the dollar dipped after U.S. inflation data bolstered the case for softer Federal Reserve monetary policy. The MSCI’s Latin American currencies index gained 1.2%, hitting its highest level in more than eight years. The dollar index slid 0.6% against a basket of major currencies after a U.S. government report showed March consumer prices notched their smallest gain in almost two years. Brazil’s real jumped 1.6% against the dollar, briefly breaching the 5-real level and touching its highest mark in more than two months. Brazil’s central bank chief Roberto Campos Neto said that while inflation has decreased, persistent pressures remain, following recent data that has buoyed markets and fueled bets of earlier monetary easing. “We think headline inflation has peaked in Brazil, Chile, and Mexico, but not in Colombia where it has just moderated,” strategists at TD Securities said in a note. “However, core inflation has shown a high degree of permanence.” Data showed Brazil’s retail sales rose 3.8% in January. Economists polled by Reuters poll had expected an increase of 3.2%. Peru’s sol added 0.6% against the greenback ahead of the Peruvian central bank’s monetary policy decision on Thursday. “Although the MPC recently reaffirmed that the ‘pause’ at the Feb. meeting did not necessarily imply the end of the tightening cycle, we hold the view that the bar to resume tightening is high,” economists at Goldman Sachs said in a note. They added that this would bar any deterioration of the political and social backdrop that could generate a negative shock to the capital account and the Peruvian sol, and an unexpected re-acceleration of inflation that could dislocate expectations further. The Mexican peso gained 0.6% against the dollar. Colombia’s peso jumped 1.3%, supported by a softer dollar and firm oil prices. Colombian President Gustavo Petro said on Tuesday the country’s central bank could issue bonds to raise funds to pay reparations to millions of victims of its nearly six-decade conflict, citing a lack of other funding options. The Chilean peso rose 0.6% against the dollar, extending gains after it jumped more than 1% on Tuesday. Latin American stocks advanced 1.2%, with the index at its highest level in more than two months. Brazil’s Bovespa gained 0.8%, helped by a rise in financial stocks. In Bolivia, President Luis Arce said on Tuesday the country may start exporting lithium batteries starting in 2026, as part of the government’s plan to industrialize its vast resources of the white metal, a key component for powering electric vehicles. Key Latin American stock indexes and currencies at 1446 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 994.09 -0.22 MSCI LatAm 2293.30 1.24 Brazil Bovespa 107009.50 0.75 Mexico IPC 54553.46 -0.09 Chile IPSA 5306.88 0 Argentina MerVal 263631.48 1.411 Colombia COLCAP 1225.14 0.3 Currencies Latest Daily % change Brazil real 4.9296 1.57 Mexico peso 18.0641 0.51 Chile peso 801.7 0.86 Colombia peso 4446.43 1.33 Peru sol 3.7719 -0.08 Argentina peso (interbank) 214.2000 -0.20 Argentina peso (parallel) 391 0.77 (Reporting by Shashwat Chauhan and Bansari Mayur Kamdar in Bengaluru; Editing by Paul Simao)
