Brazil’s real posted the biggest decline in emerging markets after the government’s interventions this week failed to staunch capital outflows triggered by faltering economic growth and a jump in U.S. bond yields.
Brazil’s real rose from a four-year low after the government removed a 1 percent tax charged on wagers against the dollar in a second easing this month of capital controls to stem the local currency’s rout.
Brazil’s real touched a four-year low, prompting the central bank to intervene for a second straight day to stem the rout. Swap rates surged on concern the weakening currency will cause inflation to accelerate.
Mexico’s peso fell after a report showing U.S. companies added the fewest number of workers in seven months added to evidence that economic growth in the Latin American nation’s biggest trading partner is slowing.
Mexico’s peso fell for a sixth day in its longest losing streak since November as speculation the Federal Reserve will consider scaling back its record program of asset purchases reduced demand for emerging-market assets.
Yields on Brazilian interest-rate futures extended their weekly drop to the biggest since 2008 as the government planned to reduce returns on savings accounts to facilitate deeper cuts in the benchmark Selic rate.
Mexico’s peso rose to a 20-month high amid speculation lawmakers are moving closer to approving a bill to boost competition in the telecommunications industry, fueling optimism for legal reforms that could bolster growth.
Argentina is attempting to persuade debt holders to accept a swap offer for the second time this year as the government seeks to regain access to international markets with $7 billion of foreign obligations due next year.
Mexico’s peso gained the most in two months as the Greek government’s deadline for the biggest sovereign restructuring in history passed with a majority of investors signaling their readiness to participate in the swap.