Latin American Assets Tumble on Middle East Tensions, Brazil Hit Hardest on May 19

On May 19, Latin American assets tumbled as Middle East geopolitical tensions kept investors on high alert, with Brazil's currency, stocks, and bonds bearing the brunt of selloffs. Brazilian real dropped 1%, leading declines among major regional currencies, while the Bovespa stock index plunged 1.6% to four-month lows. The selloff accelerated after U.S. President Trump indicated Washington could launch military strikes on Iran, triggering a rush into safe-haven assets and dragging the MSCI Latin America currency index down 0.5%. According to the latest Atlas/Bloomberg poll data, Senator Flavio Bolsonaro trails incumbent President Luiz Inácio Lula da Silva in presidential race preferences, cooling market expectations of ruling party transition.
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