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JP Morgan cuts foreign exchange exposure in Latam on US election

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Chile’s peso gained momentum across Latin American currencies earlier this week

JP Morgan has reduced its foreign exchange exposure to Latin America with the likeliness of a blue wave outcome. 

The bank in a note to its clients said “In Latam FX, we cut the regional OW, which would benefit most from a strong cyclical picture coming from large U.S. fiscal stimulus and clear Biden victory. However, the bank kept an overall neutral stance on emerging market currencies, saying investors needed to ‘wait for the outcome of the Presidential election, which is close and changing hourly.’”

Chile’s peso gained momentum across Latin American currencies earlier this week. The gains were attributed to positive Chinese manufacturing data which supported copper prices, media reports said. However, the sentiment remained quiet owing to the US elections. 

It is reported that China’s manufacturing sector demonstrated strong performance in nearly a decade in October. The mainland is the largest consumer of metal. Now JP Morgan will hold 71 percent of its Chinese securities joint venture following the completion of a transaction to acquire a 20 percent stake from its local partner, media reports said. 

The increase in its stake holding will in fact position the bank for having the  highest ownership stake in Chinese securities joint ventures. It is reported that China’s factory sector reached a decade-high record on the back of heavy domestic demand.

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