Most currencies rise; Brazil central bank analyzing inflation data for policy approach

Most emerging market currencies outside Asia gave up early sluggishness to firm as the dollar moved slightly away from two-year highs, with crude exporters Mexico and Colombia’s pesos gaining despite a 4% tumble in oil prices

The Latin American currencies rose 0.2% and 0.4% respectively, while Turkey’s lira and South Africa’s rand were also well in the black, cutting some losses for the broader emerging market currencies index

World’s biggest copper producers Chile and Peru, however, saw their currencies weaken as prices of the red metal slipped

“Food prices remain high, central banks remain hawkish, and U.S. rates are unlikely to peak that early in the cycle. … In EMFX, we see risks of a pull back, as the SPX is often trading on the back-foot in early April and as commodity prices are consolidating,” Citigroup strategists said in a note

“But that may well be a buying opportunity for the high carry FX.”

Brazil’s central bank chief Roberto Campos Neto said on Monday that policymakers were analyzing the recent inflation surprise in the country as well as policy normalization in the United States to see if it marked a change of trend in Brazil’s aggressive tightening cycle, which was seen ending soon

Brazil’s real was flat in choppy trade

Investors now look to first-quarter earnings, with big U.S. banks set to kick them off this week. A policy decision by the European Central Bank and U.S. inflation data for March are also due this week

Elsewhere, after a strong day for Pakistan markets following the ouster of Prime Minister Imran Khan, the parliament on Monday elected opposition leader Shehbaz Sharif, a more

Western-friendly politician, as the country’s new premier

“The main challenge facing Shehbaz Sharif … is stabilizing the economy. The key to achieving this is a deal with the IMF,” said Gareth Leather, senior Asia economist at Capital Economics

“The price for any further support will be a further tightening of fiscal and monetary policy. While this will cause growth to slow in the near term, it is also Pakistan’s best hope of a avoiding a full-blown crisis

Russia’s rouble fell in Moscow trading, last at 79.5 after the central bank lifted some capital controls

Emerging market stocks also fell, with those in Latin America down between 0.2% and 0.6%

Braskem topped Brazil’s Bovespa index, up 3.2% after a report said holding company J&F Investimentos has prepared an offer to purchase a controlling stake in the Brazilian petrochemical firm