By Susan Mathew June 30 (Reuters) – Brazil’s real toppled more than 1% on Wednesday weighed by political noise amid rising COVID-19 cases, while most other regional currencies traded flat to higher as commodity prices picked up. Pressure on Brazilian President Jair Bolsonaro mounted after accusations of irregularities forced Brazil to suspend a $324 million deal with India’s Bharat Biotech for its COVID-19 vaccine. Bolsonaro fired a Health Ministry official on Wednesday in relation to the graft accusation. Bolsonaro’s popularity has dropped amid investigations of his administration’s pandemic response, with the number of deaths due to COVID-19 above 500,000. “The bottom line is that this weakens the government and may imply (more) fiscal spending to maintain support with the parties in the Congress,” said Wilson Ferrarezi, an economist at TS Lombard. “The more complicated situation in the coming months especially ahead of the electoral race in 2022 (will weigh on the real),” he said. The real looked set to post its biggest slide in more than a week, but was on track for its best quarter since the same quarter of 2009, up almost 13%. A strong dollar ahead of U.S. jobs data on Friday added to intraday pressure. The data will be watched to gauge if it has the capacity to prompt a change in the Federal Reserve’s stance to keep interest rates on hold. Mexico’s financial stability council on Tuesday highlighted a pickup in inflation in some advanced economies and the likelihood of monetary policy tightening as risks to the country’s financial system. The peso slipped as much as 0.3% before steadying, while stocks extended losses to a fourth day. The IPC stocks index, however, is set for its third straight quarterly gain. Moody’s on Tuesday said a credit upgrade for Mexican state oil company Pemex is unlikely given its consistent negative free cash flow generation. The agency currently assigns a junk rating to Latam’s most indebted oil major. Rising copper and oil prices, meanwhile, supported currencies of exporters Chile and Colombia, respectively, with the former hitting a two-week high. Key Latin American stock indexes and currencies at 1419 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1374.35 -0.2 MSCI LatAm 2631.26 -0.95 Brazil Bovespa 126982.65 -0.27 Mexico IPC 50187.17 -0.3 Chile IPSA 4323.38 -0.02 Argentina MerVal – – Colombia COLCAP 1258.83 0.15 Currencies Latest Daily % change Brazil real 4.9882 -0.93 Mexico peso 19.8470 -0.22 Chile peso 725.7 0.07 Colombia peso 3756.25 0.22 Peru sol 3.883 0.02 Argentina peso 95.7200 -0.01 (interbank) (Reporting by Susan Mathew in Bengaluru; Editing by Kirsten Donovan)
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