By Bruno Federowski
SAO PAULO, Jan 13 The Brazilian real weakened
more than 1 percent on Friday on a technical correction after an
emerging market rally lifted it to its strongest in two months.
The real slipped 1.3 percent in early afternoon
trading, moving back past 3.20 to the dollar.
Appetite for emerging market assets soared on Thursday after
U.S. President-elect Donald Trump's first news conference since
the election failed to expand on the protectionist rhetoric he
adopted during the campaign.
Market speculation that the Brazilian central bank could
resume market intervention after standing pat for a month also
weighed on the currency.
Throughout the last year, the bank has sold reverse currency
swaps, which function like purchasing dollars from investors for
future delivery, to reduce its costly foreign exchange exposure.
On the opposite end of the scale, the Mexican central bank
twice sold dollars to investors last week to cushion the peso's
decline to a fresh record low.
The currency has since rebounded, strengthening
around 0.5 percent on Friday, though traders warned over
potential profit-taking later in the day.
Brazil's benchmark Bovespa stock index weakened 0.3
percent after hitting a nine-week high on Thursday.
Shares of JBS SA, the world's biggest beef
exporter, led the losses following police raids against
unspecified meatpackers as part of a corruption probe. The
federal judge conducting the investigation said the scheme
favored JBS, among other companies.
Blue-chip stocks, such as lender Itaú Unibanco SA
and state-controlled oil company Petróleo Brasileiro SA
, subtracted the most points from the index.
Key Latin American stock indexes and currencies at 1555 GMT:
Stock indexes daily % YTD %
MSCI Emerging Markets 895.73 -0.1 3.99
MSCI LatAm 2427.93 -0.61 4.37
Brazil Bovespa 63784.67 -0.26 5.91
Mexico IPC 46328.08 0.58 1.50
Chile IPSA 4231.88 -0.07 1.94
Chile IGPA 21097.47 -0.03 1.75
Argentina MerVal 18741.27 0.8 10.78
Colombia IGBC 10201.96 -0.4 0.73
Venezuela IBC 31616.87 1.52 -0.28
Currencies daily % YTD %
Brazil real 3.2153 -1.26 1.05
Mexico peso 21.6750 0.58 -4.30
Chile peso 659.5 0.26 1.70
Colombia peso 2940.5 -0.58 2.07
Peru sol 3.364 -0.09 1.49
Argentina peso (interbank) 15.8550 -0.22 0.13
Argentina peso (parallel) 16.8 0.18 0.12
(Reporting by Bruno Federowski; Editing by James Dalgleish)