EMERGING MARKETS-Latam FX mixed as investors weigh regional developments, US rate outlook

By Ragini Mathur and Sudeshna Ghoshal

Nov 13 (Reuters) - Latin American currencies were mixed on Friday, with Chile's peso falling to a 19-month low as investors weighed the outlook for US interest rates alongside regional economic data and central bank signals.

Chile's peso weakened 0.4% against the dollar to its lowest level since April 2025, while the country's 2042 and 2054 dollar bonds each fell about 1 cent, according to Tradeweb data.

Copper, Chile's top export, dropped to a near four-month low and was on track for a fifth consecutive weekly decline. MET/L

The metal has been a major beneficiary of AI-related investment. But sentiment toward the sector weakened after Nvidia Chief Executive Jensen Huang resigned on Thursday, adding to concerns that spending on data-center infrastructure could slow.

MSCI's Latin American currency index .MILA00000CUS was little changed on the day but remained on course for a third straight weekly decline. The regional equities index .MILA00000PUS rose 0.5%, leaving it broadly flat for the week.

The dollar edged lower on Friday after hitting a 19-month high in the previous session, as stronger-than-expected US inflation data reinforced expectations that the Federal Reserve could raise interest rates again.

Higher US yields tend to draw capital into dollar-denominated assets, putting pressure on emerging market currencies. Weaker currencies can also fuel imported inflation, limiting central banks' room to cut rates.

In Mexico, investors assessed mixed signals from Washington on trade. Treasury Secretary Scott Bessent said he expected the US to reach trade deals with Mexico and Canada, a day after President Donald Trump threatened to double tariffs on Mexico over a migrant caravan.

The Mexican peso was little changed, while the benchmark stock index .MXX fell 0.6%, retreating after reaching a record high in the prior session.

Mexico's central bank last week cut its benchmark rate by 25 basis points to 6.25%.

"Obviously, you got a lot of relief from lower interest rates because that came as somewhat of a surprise," said Juan Perez, director of trading at Monex.

"You're looking at a world in which the US, over the past few years, has spent time focusing on imposing tariffs. But now, given the potential for friction within the US government, there appears to be less of a threat from that."

Elsewhere, Peru's central bank raised its benchmark rate by 25 basis points to 4.50% late on Thursday, as expected, warning that supply shocks, firmer inflation expectations and strong domestic demand were complicating inflation's return to target.

Peruvian stocks .MIPE00000PUS fell 0.5%, while the sol gained 0.1%.

Brazil's retail sales rose 0.1% in September from the previous month, defying forecasts for a 0.3% decline, even as high borrowing costs continued to restrain consumer demand in Latin America's largest economy.

Brazil's Senate on Thursday approved the main text of a fiscal package backed by President Luiz Inacio Lula da Silva's government that combines spending curbs with revenue measures aimed at meeting fiscal targets. Senators are due to vote on amendments next week.

The real , which fell to a 17-month low in the previous session, was little changed on the day, while Brazil's benchmark Bovespa index .BVSP gained 0.5%.

Key Latin American stock indexes and currencies: