By Susan Mathew

Oct 2 (Reuters)Argentina’s peso dropped on Friday after the central bank said it would allow a managed float of the currency, while most other Latin American units fell as global sentiment took a hit after U.S. President Donald Trump tested positive for the novel coronavirus.

The Argentine peso ARS=RASL led losses with the bank saying it would abandon its current “uniform daily devaluations and introduce greater volatility” as the gap between the official exchange rate and the rate quoted in informal currency markets widened close to 93%.

The bank said it would offer trades at 76.95 pesos per dollar at Friday’s open, around 0.91% weaker than the close on Thursday. It also increased the important overnight repo rate to 24%, from the current 19%.

“Even if the number of measures announced is not low, we do not expect them to change the current dynamics. The measures are likely to be seen as insufficient and hence run the risk of being counterproductive,” Citigroup Latam FX strategists said a note.

The safe-haven dollar gained traction after Trump and wife, Melania, contracted the disease just four weeks before U.S. elections. FRX/

Brazil’s real BRBY, was flat with data showing industrial output rose, slightly less than expected, continuing a pick-up after shuddering to a standstill during coronavirus-linked lockdowns.

A Reuters poll showed that Latam currencies are set to remain weighed down this quarter by fears about Brazil’s public finances and Mexico’s close link to U.S. politics.

The real was on track for its fourth straight week of losses, down about 1.7%.

Mexico’s peso MXN= continued its recent trend of outperforming regional peers, up 0.7%, all set to post its biggest weekly rise in more than four months.

Currencies of Colombia COP= and Chile CLP= declined 0.7% and

By Susan Mathew

Oct 2 (Reuters)Argentina’s peso dropped on Friday after the central bank said it would allow a managed float of the currency, while most other Latin American units fell as global sentiment took a hit after U.S. President Donald Trump tested positive for COVID-19.

The Argentine peso ARS=RASL led losses with the bank saying it would abandon its current “uniform daily devaluations and introduce greater volatility” as the gap between the official exchange rate and the rate quoted in the country’s informal currency markets widened close to 93%.

The bank said it would offer trades at 76.95 pesos per dollar at Friday’s open, around 0.91% weaker than the close on Thursday. It also increased the important overnight repo rate to 24%, from the current 19%.

“Even if the number of measures announced is not low, we do not expect them to change the current dynamics. The measures are likely to be seen as insufficient and hence run the risk of being counterproductive,” Citigroup Latam FX strategists said a note.

“Even if increasing the repo rate is a move in the right direction, the size of the increase is probably too small given the size of the imbalance currently observed in the official FX market,” they said, adding that raising the rate of volatility of the official FX rate will not encourage a higher supply of dollars but rather have the opposite effect.

The safe-haven dollar gained traction after Trump and wife, Melania, contracted the disease just four weeks before U.S. elections. FRX/

Mexico’s peso MXN= fell as much as 1% before trading steady, while the currencies of Colombia COP= and Chile CLP= declined 0.4% and 0.6%, respectively.

Brazil’s real BRBY, meanwhile, rose 0.6% in volatile trade with data showing industrial output in the country

BUENOS AIRES (Reuters) – Argentina’s central bank said on Thursday that it would allow a managed float of the peso currency and abandon its current “uniform daily devaluation” strategy as it seeks to adapt its monetary policy amid sharpening economic turmoil.

The move comes with the gap between the official exchange rate and the rate quoted in the country’s informal currency markets close to 93% due to the distrust of investors and strong black market demand for dollars.

Among a series of measures, the bank said it would block senior public officials from buying and accumulating foreign currency and would move to facilitate the purchase of Chinese yuan against Argentine pesos for foreign trade operations.

A central bank source said that the entity would offer trades at 76.95 pesos per dollar

at Friday’s open, around 0.91% weaker than the close on Thursday.
=rasl>

Argentina’s government had recently tightened capital controls, which had sparked investor jitters and raised concerns about economic growth prospects. The controls were first imposed last year to stem a decline in foreign currency reserves.

A second bank source said that the plan for pricing on Friday was part of a move to “abandon uniform devaluations and introduce greater volatility”, adding that it meant that the daily price change would be less uniform going forward.

Argentina’s center-left Peronist government separately temporarily lowered taxes on exports of soy and other products on Thursday in a move to boost trade and help revive a flagging economy set to contract 12% this year.

The bank also increased the important overnight repo rate to 24%, from the current 19%.

(Reporting by Jorge Otaola; Writing by Dave Sherwood; Editing by Christopher Cushing)

Copyright 2020 Thomson Reuters.

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By Sagarika Jaisinghani

Sept 29 (Reuters)The Brazilian real and the Mexican peso outperformed Latin American currencies on Tuesday following a slump in the past two sessions, while regional equities tracked a slide on Wall Street ahead of the U.S. presidential debate later in the day.

The real BRBY was up 0.2% by 1524 GMT, with the dollar slipping from recent two-month highs as investors held off on making big bets ahead of the first debate between U.S. President Donald Trump and Democratic challenger Joe Biden. FRX/

Brazil’s real has fallen to record lows this year due to the economic fallout from the COVID-19 pandemic, although a string of recent data has raised hopes that Latin America’s largest economy could return to growth next year.

Investor sentiment has also been subdued by concerns around the government’s plans to fund a new minimum income program called Renda Cidada, which translates as “Citizen Income”.

“The market is still digesting the news of the Citizen Income financing and will be waiting for some explanation from the government” on how to reconcile this spending with an already tight budget, said Victor Beyruti, economist at Guide Investimentos.

The Mexican peso MXN= gained 0.3%, snapping a two-day losing streak, while the country’s stock index .MXX fell half a percent with financials and consumer staples stocks leading declines.

Samuel Bentley, a client portfolio manager at fund house Eastspring Investments, told the Reuters Global Markets Forum that broad weakness in emerging stocks had created value opportunities and that his fund was considering increasing exposure to Mexico, among other countries.

The Chilean peso CLP= eased 0.2% and was on course for its second straight monthly decline, while the Peruvian sol PEN= and Colombian peso COP= shed about 0.1% each.

A basket of Latin American equities .MILA00000PUS tumbled