Latin American equities and currencies advanced on Friday, reversing the prior week’s declines as the U.S. dollar softened and commodity prices firmed.
The MSCI Latin America equities index rose 2.3% to 3,035.25, up 73.86 points, while the regional currency gauge added 0.4%. Both benchmarks were set to post weekly gains after last week’s retreat, which was driven by a rotation into AI-focused Asian markets and a selloff in Brazilian assets.
Weaker demand for the U.S. dollar supported regional markets, with the greenback hovering near multi-month lows. Investors questioned whether recent U.S. Treasury efforts to stabilize bond markets were undermining confidence in the currency’s long-term outlook.
Commodity prices provided additional support, lifting the broader investment case for the region’s export-driven economies. The combination of a softer dollar and firmer raw material prices helped reverse last week’s losses.
In Colombia, separate data showed the economy expanded 3.5% year-over-year in the second quarter, outpacing much of Latin America. However, concerns over the country’s fiscal deficit persisted, tempering optimism over the growth outlook.
Investors will turn their attention next week to the Jackson Hole economic symposium, where remarks from the Federal Reserve chair could signal the direction of U.S. interest-rate policy and further influence regional markets.
