China Risks To FX

We have been highlighting for some time now that the foremost threat to our generally bullish macroeconomic outlook for Latin America comes from the prospect of a double dip downturn in China. In FX terms, we believe that a fall in Chinese demand for commodities will hit the copper-biased Chilean peso and the Peruvian sol hardest, reinforcing our view that the Mexican peso will outperform relative to other Latin America majors going forward.

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