* Chile’s Codelco resumes operation despite strike * Czech c.bank raises rates by 125-bps * Bolsonaro says next CEO will replace Petrobras management By Shreyashi Sanyal June 22 (Reuters) – Chile’s peso hit a record low on Wednesday after workers at state-owned copper producer Codelco went on strike, while the Czech crown eased a shade against the euro after the country’s central bank lifted its policy rate. The peso was last down 1.5% and touching an all-time low of 886.90 against a stronger dollar as workers at the world’s largest copper producer protest against the closure of a smelter located in an area with high levels of contamination. Codelco has resumed operations despite the strike, the government said. Other emerging market currencies were mostly lower, with the MSCI’s index for Latin American units down 0.6%. Hurt by a firming greenback, fears of a global recession amid aggressive tightening cycles by central banks have pushed investors out of riskier emerging market currencies. Market participants cautiously watched Federal Reserve Chair Jerome Powell’s congressional testimony, for clues on whether another 75 basis-point cut is on the table for the central bank’s meeting in July. “Investors will need to see compelling evidence that inflation is cooling before we see a turnaround in market sentiment,” strategists at UBS wrote in a client note. The Czech central bank’s board raised its main interest rate by 125 basis points to 7.00%, extending a year-long policy tightening drive to battle inflation that has surged to a near three decade high. The Czech crown eased a little after the rate decision to 24.73 against the euro. Emerging markets through the remainder of the week will be keyed in on more central bank action. Mexico is expected to hike its benchmark lending rate by 75 basis-points in its meeting on Thursday. Mexico’s peso edged 0.3% higher. Among others, Egypt’s central bank is also expected to raise rates, while the Philippines was set to raise its policy rate by 25 basis points in its second hike after starting its the tightening cycle in May. Indonesia will also meeting, is likely seen holding rates, but will kick off their cycle soon. Brazil’s real weakened 0.9%, reversing close to all its gains from the previous session. Sao Paulo stocks fell 1.1%, with a 2% decline in shares of oil producer Petrobras among top drags. Brazilian President Jair Bolsonaro said Caio Paes de Andrade, his pick to be Petrobras’ next chief executive, will replace the company’s management when he takes over the position. Key Latin American stock indexes and currencies at 1430 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 994.24 -2.24 MSCI LatAm 2087.81 -0.73 Brazil Bovespa 99133.38 -0.55 Mexico IPC 47392.99 -1.48 Chile IPSA 5095.17 0.21 Argentina MerVal 85615.44 -1.075 Colombia COLCAP 1393.89 -0.32 Currencies Latest Daily % change Brazil real 5.1460 0.13 Mexico peso 20.0498 0.33 Chile peso 889.3 -0.81 Colombia peso 4011.63 -0.02 Peru sol 3.7183 -0.25 Argentina peso (interbank) 123.8600 -0.15 Argentina peso (parallel) 219 0.46 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Angus MacSwan)
Read More: EMERGING MARKETS-Chilean peso hits record low, Czech crown eases after rate hike
