February 22, 2017 / 9:35 PM / 6 months ago

UPDATE 1-EMERGING MARKETS-Mexico peso strengthens after currency hedges announced

 (Recasts with peso strengthening; updates table)
    By Bruno Federowski
    SAO PAULO, Feb 22 (Reuters) - Mexico's peso strengthened on
Wednesday to its highest level since the election of U.S.
President Donald Trump, a day after the central bank said it
would offer up to $20 billion in currency hedges. 
    The peso strengthened 0.7 percent to trade at 19.87
per dollar, which central bank Governor Agustin Carstens said
reflected confidence in the hedge. 
    "The measure has been very successful," Carstens said,
adding the hedge helps remove volatility from the foreign
exchange market. 
    Mexico's foreign exchange commission said the program will
not use the central bank's international reserves, but instead
will auction contracts similar to non-deliverable forwards that
pay in pesos.
    Brazil's central bank cut its benchmark interest rate by 75
basis points to 12.25 on Wednesday, as expected by most
economists polled by Reuters last week.
    Some investors had speculated the bank could increase the
pace of loosening to a brisk 100 basis points after several
months of slower-than-expected inflation.
    But a report on Tuesday showed the annual inflation rate
eased less than expected in mid-February, moderating those
expectations.
    The Brazilian real strengthened nearly 0.2 percent,
while the Chilean peso traded nearly flat. 
    
    Key Latin American stock indexes and currencies at 2115 GMT:
 Stock indexes                     daily %      YTD %
                    Latest          change     change
 MSCI Emerging           952.72       0.75       9.67
 Markets                                    
                                            
 MSCI LatAm             2688.21        0.9      13.83
                                            
                                            
 Brazil Bovespa        68589.54      -0.67      13.88
                                            
 Mexico IPC            47195.68      -0.88       3.40
                                            
 Chile IPSA             4375.70       0.05       5.40
                                            
 Chile IGPA            21870.55       0.04       5.48
                                            
 Argentina MerVal      19915.25      -0.78      17.72
                                            
 Colombia IGBC          9929.40      -0.38      -1.96
                                            
 Venezuela IBC         34869.48      -0.62       9.98
                                            
                                                     
 Currencies                        daily %      YTD %
                                    change     change
                         Latest             
 Brazil real             3.0630       0.18       6.19
                                            
 Mexico peso            19.8750       0.70       4.37
                                            
 Chile peso               641.9      -0.12       4.49
                                            
 Colombia peso           2894.8       0.06       3.69
                                            
 Peru sol                 3.245       0.03       5.21
                                            
 
 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli
and Leslie Adler)
  

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