December 24 (Reuters) – Most Latin American stocks and currencies edged up in pre-Christmas trading with the Mexican peso, pushing gains to a five-week high, while the Chilean peso fell on the low copper prices.

The Mexican peso rose 0.2% and is expected to gain for the fourth week in a row. The currency of the oil-exporting country was supported by high oil prices which gained 4% this week.

However, the Mexican economy unexpectedly contracted 0.2% in October from the previous month, as the country’s faltering recovery from the impact of the COVID-19 pandemic extended into the fourth quarter, according to official data.

“Significantly weaker growth in the coming months if the new variant of the pandemic pulls the economy back may well put more downward pressure on inflation than we estimate,” wrote analysts at Société Générale in a note.

Data on Thursday showed that Mexican inflation in early December hit its highest level since 2001, at 7.45%, well above the central bank’s target of 3%, with a tolerance range of one. percentage point above and below.

The MSCI Latin American Currency Index (.MILA00000CUS) rose 0.5%, gaining for a third consecutive session and is expected to end the week slightly higher on a weaker dollar.

The dollar index was set for its worst week since October, as other risky assets held onto their recent gains, supported by fading concerns about the severity of the new COVID-19 variant.

The Chilean peso fell 0.8% to record its worst week in a month. The country’s markets were hit earlier this week after leftist Gabriel Boric won the presidential election, raising concerns about the prospects for the South American country’s market-oriented economic model.

The currency of the world’s largest copper producer has lost around 22% against the dollar this year, while the MSCI Latin American Currency Index has fallen only 4.5%.

The Colombian peso and the Peruvian sol strengthened around 0.2% each.

Latin American stocks (.MILA00000PUS) gained for the fourth session but were expected to end the week lower. Markets in Brazil and Argentina were closed before the Christmas holidays.

Main Latin American stock market indices and currencies:

Reporting by Shashank Nayar in Bangalore; Editing by Andrea Ricci

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