Latin American exchange traded funds (ETFs) are dusting themselves off today after faltering yesterday.
The Chilean peso fell for a third straight day after the Federal Reserve hinted that it would raise rates this year. The central bank wound up keeping interest rates exactly where they were. Tuesday’s loss was reactionary to the drop in major currencies such as the British pound against the U.S. dollar, says Drew Benson and Andrea Jaramillo for Bloomberg.
The Federal Reserve kept the benchmark lending rate at 2%, with the risks to inflation a major concern. Meanwhile, Chile’s inflation rate rose more than economists had forecasted, making another interest rate hike inevitable, reports Sebastian Lloyd on Bloomberg.
Consumer prices in Chile rose 1.1% in July, with annual inflation at 9.5%, the highest since 1994. Policymakers do not think a rate hike will stunt any economic growth.
The dollar against the Chilean Peso: