Latam FX hits two-week low tracking weak commodity prices

* Chile inflation undershoots estimates * Colombia inflation stands at 5.81% in September * Brazil Senate committee approves Galipolo as central bank chief * Brazil’s Azul jumps after deal with lessors * Latam stocks down 0.8%, FX off 0.5% (Updated at 1851 GMT) By Shashwat Chauhan and Johann M Cherian Oct 8 (Reuters) – Currencies of resources-rich Latin America slipped on Tuesday, tracking a drop in commodity prices, while investors weighed the implications for Brazil’s monetary policy with left-leaning Gabriel Galipolo at the helm of the country’s central bank. MSCI’s index of Latin American currencies slipped 0.6% to hit a two-week low, with iron ore producer Brazil’s real down 0.7% at a two-week low against the dollar. Iron ore futures fell as some investors unwound long positions to lock in profits, while disappointment at a lack of detailed fiscal stimulus from top consumer China also weighed. Meanwhile, the Brazilian Senate’s Economic Affairs Committee approved President Luiz Inacio Lula da Silva’s nominee Galipolo to head the central bank starting in January. “Last year when his name first surfaced, people were nervous because he seems to have a very close relationship with the labor party in Brazil. But then this year, he has made some more hawkish statements,” said Eduardo Ordonez Bueso, an emerging markets debt portfolio manager at BankInvest. “The closer we get to elections, I wouldn’t be surprised if he becomes a little more accommodative in policy decisions.” Mexico’s peso dipped 0.1% in choppy trading ahead of a domestic inflation reading on Wednesday. Mexican President Claudia Sheinbaum late on Monday said that she had sent two proposals to Congress to implement constitutional reform of the judiciary by tweaking electoral laws. Copper producer Chile’s peso weakened 0.46% after data showed consumer prices in the country rose less than expected in September, paving the way for the central bank to keep reducing borrowing costs when it is slated to meet next week. Oil producer Colombia’s peso slipped 0.25% as crude oil prices eased after a recent rally to fall over 4%. Data late on Monday showed Colombia’s consumer prices rose by a less than expected 5.81% in September. Most equities in the region were also lower, with MSCI’s gauge down 0.87% to touch more than a three-week low, with Mexican stocks dropping 0.63%. Brazil’s Bovespa lost 0.27%, although airline Azul jumped around 9.6% after it announced a debt deal with lessors. Bourses in Brazil, Mexico, Argentina, Chile and Peru ended the third quarter on an upbeat note. Bueso said that regional stocks are well positioned to rally further given China’s recent stimulus efforts, further interest rate cuts by the U.S. Federal Reserve and with inflation under control in most Latin American economies. Markets in Peru were closed for a public holiday. Key Latin American stock indexes and currencies: Latin American market prices from Reuters MSCI Emerging Markets 1156 -2.35 MSCI LatAm 2211.42 -0.87 Brazil Bovespa 131583.34 -0.33 Mexico IPC 51744.85 -0.57 Chile IPSA 6484.35 0.14 Argentina Merval 1735149.3 1.199 8 Colombia COLCAP 1298.81 -0.8 Brazil real 5.5283 -0.7 Mexico peso 19.3215 -0.27 Chile peso 932.3 -0.72 Colombia peso 4223.06 -0.26 Peru sol 3.7198 0 Argentina peso 974 0.10 (interbank) Argentina peso (parallel) 1155 2.60 (Reporting by Shashwat Chauhan and Johann M Cherian in Bengaluru Editing by Christina Fincher and Nick Zieminski)