(Updates closing prices)
SAO PAULO, Dec 8 (Reuters) - Latin American currencies weakened on Tuesday after sluggish trade data from China and a drop in oil prices triggered a bout of investor risk aversion.
Data showing China’s exports fell more than expected in November reinforced worries that the world’s second-largest economy could extend its slowdown into the fourth quarter, further weighing on commodity prices.
The Mexican peso fell 0.79 percent, pressured by a slide in oil prices to their lowest since early 2009 amid fears of persistent oversupply.
The Brazilian real underperformed, shedding 1.36 percent after reversing early gains. Trading was volatile as investors debated the consequences of an ongoing impeachment process against President Dilma Rousseff after a rift with a key ally.
Some traders believe an impeachment could help the country heal from what is likely to be its longest recession since the 1930s. Others say, however, that political turmoil could derail efforts to balance fiscal accounts and possibly provoke a downgrade of Brazil’s sovereign debt.
“The reaction so far has been positive, but we have to wait and see how (the impeachment process) develops to understand how the market will be affected,” said Marcos Trabbold, a trader at B&T brokerage in São Paulo.
Brazil’s benchmark Bovespa stock index ended 1.72 percent lower, while shares of Grupo BTG Pactual SA slid nearly 15 percent.
The stock has lost almost half its value since Nov. 24, the day before André Esteves, the bank’s founder and former chief executive officer, was arrested for allegedly obstructing a corruption probe.
On Monday, prosecutors filed formal charges against Esteves, without saying whether Latin America’s largest independent investment bank might be investigated. (Reporting by Bruno Federowski; editing by James Dalgleish, G Crosse)