Latin American currencies weakened against the US dollar on Friday after China imposed retaliatory tariffs on US goods, renewing fears of a global slowdown, while the Mexican peso dropped to near 8-month lows on worrying domestic growth data. The peso fell as much as 0.6% to trade at 19.9374 per dollar - its weakest since late December - after Mexican gross domestic product data showed the economy stagnated in the second quarter and was even closer to entering a recession in the first half of 2019 than previously estimated.

The peso was last down 0.2%. Brazil's real fell 0.5%, in line with emerging market peers, as risk appetite took a hit after China unveiled retaliatory tariffs on about $75 billion worth of US goods, adding 10% on top of existing rates in the latest tit-for-tat exchange. Sao Paulo-listed shares also fell 0.8%, mirroring weakness in global stock markets and a slump in oil prices.

The latest salvo from China came as a year-long trade war between the two biggest economies threatened to tip the global economy into recession, with investors betting central banks and governments will do more to support growth. Investors are now focused on a highly anticipated speech from Federal Reserve chief Jerome Powell at an economic symposium in Jackson Hole, Wyoming at 10 am (1400 GMT). Peru's sol slid 0.13% after the finance ministry slashed its view for economic growth in 2019 to 3% from its previous estimate of 4.2%, citing US-China trade tensions and weak mining and fishing activity.

Copyright Reuters, 2019