Latam FX Dips, Stocks Rise Amid Trump-Fed Tensions

Latam FX dipped and stocks rose as markets assessed tensions between Trump and the Fed. Higher commodities and a weaker dollar lifted assets amid US policy shifts. Unilever plans to invest $1.5 billion in Mexico, including a new factory. Walmart's Mexico unit saw consumption picking up in Q2, and the company invested $6 billion in new stores and centers in 2025.

Latin American financial markets experienced a mix of movements on Wednesday as investors assessed the potential fallout from rumors about U.S. President Donald Trump's plans to sack Federal Reserve Chair Jerome Powell. The dollar index (DXY) tumbled as much as 0.9% following the reports, which cited anonymous sources, sending most Latin American currencies higher [1].

Mexico's peso (USDMXN) gained the most, rising by 0.7%, while Peru's sol (USDPEN) and Colombia's peso (USDCOP) also strengthened. Brazil's real (USDBRL) was down only 0.2% after earlier declines. These currency movements were attributed to the perceived dollar weakness and expectations of lower U.S. interest rates, which could boost Latin American exports [1].

In the equity markets, MSCI Latam (.MILA00000PUS) reversed early declines to gain 0.1%, while the regional stocks benchmark (.MILA00000PUS) slipped 0.4%. Brazilian shares (IIBOV) fell 0.6%, and Colombia's ICAP were down 0.4%. The dip in stocks was partially offset by the positive sentiment from the potential easing of U.S. tariffs [1].

Commodities played a significant role in the day's market dynamics. Brent crude oil and European gas prices saw mixed movements, with Brent crude down 1% and European gas up 1.6%. Meanwhile, gold futures retreated 0.2% and copper futures fell 0.5% [2].

The energy sector was particularly impacted by lower oil and gas prices, with TotalEnergies and BP flagging that these weaker prices would weigh on their second-quarter earnings. However, Antofagasta, a Chilean copper miner, reported strong production growth and cost savings, while Rio Tinto highlighted high iron-ore output from its Australian mines [2].

Investment news included Unilever's plan to invest $1.5 billion in Mexico, including a new factory, and Walmart's Mexico unit seeing consumption pick up in Q2, with the company investing $6 billion in new stores and centers in 2025 [1].

Overall, Latin American markets reacted to the combination of geopolitical tensions and commodity price shifts, with currencies benefiting from the weaker dollar and stocks showing mixed performance.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3TD0ON:0-latam-fx-jump-on-weak-dollar-after-report-trump-to-sack-powell-soon/
[2] https://www.tradingview.com/news/DJN_DN20250716005049:0-totalenergies-expects-hit-from-lower-oil-gas-prices-commodities-roundup/