Thursday, 17 September 2015 01:14
SAO PAULO: Latin American financial markets rallied on Wednesday following a jump in Chinese stocks that tempered investors’ concern about the health of the world’s No. 2 economy.
Investors remained cautious, however, ahead of a crucial monetary policy decision by the US Federal Reserve on Thursday. While many expected the Fed to delay an interest rate hike to December, some feared rates could go up this week.
“A rally in Chinese stocks is supporting emerging market currencies, but gains are limited by investors’ caution ahead of the Fed decision,” said Luciano Rostagno, chief strategist at Mizuho bank in Brazil.
Analysts also warned that the rally in Chinese equities should be taken with a grain of salt as it appeared to be a result of government intervention rather than investors’ willingness to buy.
The Colombian peso led gains in the region, up 1.3 percent against the US dollar, as investors increased bets that the central bank will soon start raising interest rates to rein in inflation.
Colombia’s inflation has been above a government target since February, partly fueled by a 20 percent depreciation of the local currency so far this year.
