April 30, 2019 / 2:58 PM / 3 months ago

UPDATE 1-Argentina's peso rises even as strike hobbles public services

(Adds information on the strike, context on peso)

By Jorge Otaola and Nicolás Misculin

BUENOS AIRES, April 30 (Reuters) - Argentina’s embattled peso gained against the dollar on Tuesday after the central bank announced measures to better control volatility of the country’s currency amid increasing political and economic strife just months before a presidential election.

The peso was up 1.12 percent at the open to 43.60 per U.S. dollar, after closing 3.56 percent stronger at 44.37 per U.S. dollar on Monday.

The measures announced earlier in the week gave Argentina’s central bank more freedom to support the local currency by loosening a no-intervention peso trading band that had been in place since October, an effort to calm local markets.

Even as the peso strengthened following the bank announcements, labor unions kicked off a widespread strike Tuesday morning in protest of Argentine President Mauricio Macri’s fiscal austerity program, blocking streets and shutting down traffic in the city center.

State offices, public schools and airplane and truck service were all impacted by the strike, a sign of increasing unrest with Macri’s government just six months before he seeks re-election in October.

A proponent of free markets, Macri came to office in 2015 as a favorite among business leaders and investors. Opinion polls show him losing popularity as he cuts public utility subsidies to erase the primary fiscal deficit.

Argentina’s previous leader, Cristina Fernandez, a free-spending populist who increased government’s role in the economy, has been gaining popularity and may run for the presidency again in October.

The peso hit a record low on Friday, ending a tough week for local markets buffeted by uncertainty over Argentina’s recession, 54% inflation and the upcoming election. (Reporting by Jorge Otaola and Nicolas Misculin, writing by Dave Sherwood Editing by Marguerita Choy)

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