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EMERGING MARKETS-Brazil, Mexico currencies up after weak U.S. economic data
June 26, 2017 / 10:07 PM / 6 months ago

EMERGING MARKETS-Brazil, Mexico currencies up after weak U.S. economic data

 (Adds details from Mexico, final data)
    SAO PAULO, June 26 (Reuters) - Brazil and Mexico's
currencies strengthened on Monday after weaker-than-expected
U.S. manufacturing data bolstered bets that the U.S. Federal
Reserve will increase interest rates by less than planned in
coming months.
    New orders for key U.S.-made capital goods unexpectedly fell
in May and shipments declined, suggesting a loss of momentum in
manufacturing halfway through the second quarter.
    The reports added to a recent batch of mixed economic
figures that have left investors skeptical about the Fed's
stated plan of raising U.S. rates once more before the end of
2017 and another three times next year. A slower pace of hikes
could support demand for high-yielding emerging market assets.
    Traders will look for further clues on the U.S. central
bank's outlook on Tuesday, when Fed Chair Janet Yellen is due to
deliver a widely anticipated speech in Europe.
    The Brazilian real strengthened 1.13 percent against
the dollar, and the Mexican peso touched its strongest
level since May 2016, closing up more than 0.8 percent.
    Argentina's peso, meanwhile, closed at a new low
of 16.30 per dollar due to a general realignment of portolios
for hedging purposes before the end of the month.
    Colombian markets were closed for a local holiday.
    Brazil's benchmark Bovespa stock index rose 1.8
percent, the biggest gainer among markets in the region, while
Mexico's bourse climbed by 0.38 percent.
    Shares of Brazilian steelmakers, such as Cia Siderúrgica
Nacional SA and Usinas Siderúrgicas de Minas Gerais
SA, led the upswing, tracking rising prices of steel
and iron ore.
    Alpargatas SA, which is not part of the benchmark
index, rose 3.87 percent after its controlling shareholder J&F
Investimentos SA signed a nondisclosure agreement with Cambuhy
Investimentos Ltda to potentially sell all of its shares.

    Alpargatas is among the J&F assets put up for sale as the
holding company seeks funds to pay for a 10.3 billion real 
($3.11 billion) fine with Brazilian prosecutors. J&F's fine, the
world's biggest to date, was imposed after members of the
Batista family admitted to bribing scores of politicians.
    
    Key Latin American stock indexes and currencies at 2150 GMT:
 Stock indexes               Latest        Daily     YTD
                                             pct     pct
                                          change  change
 MSCI Emerging Markets         1,019.11     0.74   18.19
                                                  
 MSCI LatAm                    2,531.28     1.53    8.14
 Brazil Bovespa               62,188.09      1.8    3.26
 Mexico S&P/BVM IPC           49,165.67     0.38    7.72
 Chile IPSA                    4,766.20     0.19   14.81
 Chile IGPA                   23,878.79     0.17   15.17
 Venezuela IBC               122,200.52     1.36  285.43
                                                        
 Currencies                      Latest    Daily     YTD
                                             pct     pct
                                          change  change
 Brazil real                     3.3015     1.13   -1.58
 Mexico peso                    17.8655     0.81   16.11
 Peru sol                         3.253     0.09    4.95
 Argentina peso (interbank)       16.30    -0.86   -2.61
                                                  
 Argentina peso (parallel)        16.62     0.66    1.20
                                                  
 
 ($1 = 3.3137 reais)

 (Reporting by Bruno Federowski; Editing by Jeffrey Benkoe and
Jonathan Oatis)
  

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