The stronger USD trend we saw triggered by the G7’s lack of comment on FX policy continues to weigh on global currencies, while equities in Europe are also “in the red” (‘0.1% to ‐1.0%) despite a positive industrial production surprise in the Eurozone (‘1.4% y/y vs ‐2.0% y/y expected). Heavy commodity prices and a broad risk off trend signal a negative open for LATAM FX, with the major question being whether BRL can continue its outperforming trend from yesterday, which we believe was driven by the large debt issuance plans announced by Petrobras. The other major news for regional FX overnight was the reported negotiations of a US$10bn swap‐line between Argentina and China.
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Scotiabank