By Bruno Federowski
SAO PAULO, Sept 30 Latin American currencies
strengthened on Friday on reports Deutsche Bank is
close to reaching an accord with U.S. officials to settle
charges related to its sale of toxic mortgage bonds before the
Concerns over the financial health of Germany's largest
lender sent investors scurrying for safer assets earlier this
Agence France-Presse reported Deutsche Bank was nearing a
settlement to pay $5.4 billion. About two weeks ago, the bank
said it would fight a $14 billion demand from the U.S.
Department of Justice.
Brazil's real currency strengthened 0.4 percent,
while the country's benchmark stock index rose nearly 1
The Mexican peso firmed more than its peers
after the country's central bank increased rates by 50 basis
points to stem the currency's decline.
The hike "seems difficult to understand for those that look
at fundamentals but seems a lot clearer for those that think of
monetary policy as a damage control tool," J.P.Morgan strategist
Carlos Carranza wrote in a client note.
The peso was pushed to historic lows over the past weeks on
concerns that Republican candidate Donald Trump could become the
next U.S. president.
He reiterated his "underweight" recommendation for
peso-denominated Mexican bonds, citing outflows, the peso's
underperformance, a weakening current account and risks related
to the U.S. election.
Key Latin American stock indexes and currencies at 1635 GMT:
Stock indexes daily % YTD %
MSCI Emerging Markets 905.38 -0.88 15.02
MSCI LatAm 2402.65 0.07 31.21
Brazil Bovespa 58751.60 0.69 35.53
Mexico IPC 47631.93 -0.08 10.83
Chile IPSA 4025.38 -0.67 9.38
Chile IGPA 20095.33 -0.55 10.71
Argentina MerVal 16751.57 0.04 43.48
Colombia IGBC 9940.64 0.44 16.30
Venezuela IBC 12967.97 1.86 -11.11
Currencies daily % YTD %
Brazil real 3.2417 0.39 21.76
Mexico peso 19.3200 1.02 -10.82
Chile peso 657.1 0.09 8.00
Colombia peso 2884.65 0.19 9.87
Peru sol 3.392 0.03 0.65
Argentina peso (interbank) 15.2450 0.85 -14.84
Argentina peso (parallel) 15.65 0.58 -8.82
(Reporting by Bruno Federowski; Editing by Jeffrey Benkoe)