(Sao Paulo and Mexico City) Most Latin American stock markets and currencies weakened sharply today as international investors fled emerging markets over worries about rising US interest rates and fears of a global recession.
By midday the Brazilian real was down 4.3 percent to 2.3 to the US dollar, as compared with 2.2 to the dollar at Friday's close.
The stock markets in Brazil, Argentina, Mexico and Colombia fell over 4 percent. Chile's IPSA stock index fell about 1.2 percent, while the Chilean peso weakened 1.5 percent against the dollar.
"It's part of a global movement away from emerging markets," said Solange Srour, who is the chief economist for Mellon Global Investments Brazil. "There's a general aversion to risk, but Brazil is in better position to weather it than many other countries."
The Latin American sell-off followed large losses in Asian and European markets earlier today.
"Emerging markets assets have had three years of exuberance, so it wouldn't be a surprise that in a period of uncertainty Brazilian assets would give back some gains," said Luiz Fernando Figueiredo, manager of the Sao Paulo-based hedge fund Maua Investimentos. "There's more uncertainty in global financial markets now due to inflation concerns, on the back of high commodities prices, and tightening cycle of interest rates in the US."