* Chile's economic activity up 0.8% in March * Latam's 7 largest economies to grow 1.4% this year - OECD * Brazil's March current account deficit widens * Latin American stocks up 1.5%, FX adds 1.1% By Bansari Mayur Kamdar May 2 (Reuters) - Currencies and stocks in Latin America climbed on Thursday after less hawkish-than-expected comments from the U.S. Federal Reserve, with Brazil's real rallying past 1% against the dollar and leading regional gains. The MSCI's indexes for Latin American stocks and currencies gained 1.5% and 1.1%, respectively, tracking the global relief rally after the Fed signaled it is still leaning towards eventual reductions in borrowing costs. "Jay Powell didn't sound a loud alarm on inflation," said Thierry Wizman, global FX & rates strategist at Macquarie, in a note. "That helped keep up hope for a rate cut from the Fed this year." The Brazilian real jumped 1.6% against the dollar, outpacing regional peers, while stocks in Latin America's largest economy gained 0.7%. Brazilian manufacturing activity improved in April, a Purchasing Managers' Index (PMI) survey showed, to 55.9 from 53.6 in March. On Wednesday, ratings agency Moody's revised Brazil's outlook to positive from stable, citing stronger economic growth while maintaining the Ba2 credit rating for the country. Meanwhile, Brazil's current account deficit stood at $4.6 billion in March, deeper than economists expected, but foreign direct investment at $9.6 billion topped expectations, central bank data showed. The Colombian peso climbed 0.3% against the greenback in a turbulent week after the central bank's 50 basis points rate cut on Tuesday roiled the currency. "The still-attractive carry trade and high oil prices have protected the COP against Colombia's slow growth, slow trend growth, and rising yields in the U.S.," Wizman added. Mexico's peso, the currency of Latin America's second-largest economy gained 0.4% versus the currency of its most important trade partner, the United States. Chile's IMACEC economic activity index grew 0.8% in March compared to the same month of the previous year, the central bank said on Thursday, landing well below the 2.0% growth expected by economists. The currency of top copper producer Chile rose 0.5% against the dollar, while number 2 producer Peru's sol slipped 0.1%. Data on Wednesday showed Peru's annual inflation rate slowed in April to 2.42%, its lowest level in three years and within the central bank's target range. In Argentina, stocks advanced 0.5%, extending gains on return from a mid-week holiday after touching a record high on Tuesday. Latin America's highest-income countries, with the exception of Argentina, will grow moderately this year and next because external demand will remain weak, the Organisation for Economic Co-operation and Development forecast. Elsewhere in emerging markets, the Czech crown rose 0.6%, erasing earlier losses against the euro after the central bank delivered a third straight 50 basis points rate cut as expected. HIGHLIGHTS: ** Central Europe's manufacturing decline deepens in April ** Qatar economy grew 1.2% year on year in Q3, 2023 ** Does Zambia's bondholder deal mean it has resolved its default? Key Latin American stock indexes and currencies at 1421 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1051.89 0.61 MSCI LatAm 2463.38 1.48 Brazil Bovespa 126815.87 0.71 Mexico IPC 56797.25 0.12 Chile IPSA 6517.12 0.08 Argentina MerVal 1329145.73 0.42 Colombia COLCAP 1361.93 0.34 Currencies Latest Daily % change Brazil real 5.1147 1.50 Mexico peso 16.9290 0.33 Chile peso 956.7 0.24 Colombia peso 3894.36 0.48 Peru sol 3.751 0.10 Argentina peso 878.0000 -0.11 (interbank) Argentina peso 1020 1.96 (parallel) (Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Alison Williams)
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Stocks mentioned in the article
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5d. change
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Capi.
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5.915 BRL | -0.34% | -1.36% | - | ||
0.6749 USD | +0.36% | +1.25% | - | ||
0.7327 USD | +0.01% | +0.30% | - | ||
0.6145 USD | +0.53% | +0.90% | - | ||
1.281 USD | +0.45% | +1.34% | - | ||
52,333 PTS | -0.61% | -0.20% | - | ||
356.8 PTS | -0.15% | +1.06% | - | ||
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