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EMERGING MARKETS-Latam currencies slip as Fed outweighs Mexico rate hike
December 16, 2016 / 4:20 PM / a year ago

EMERGING MARKETS-Latam currencies slip as Fed outweighs Mexico rate hike

By Bruno Federowski
    SAO PAULO, Dec 16 (Reuters) - Most Latin American currencies
slipped on Friday as concerns over higher U.S. interest rates
offset a sharper-than-expected rate hike by the Mexican central
bank.
    The peso fell 0.5 percent, a day after the central
bank's aggressive 50-basis-point tightening boosted the currency
by 0.7 percent. 
    The bank has raised rates five times this year in a bid to
curb price pressures stemming from a weaker peso, which set
record lows in the wake of Donald Trump's victory last month in
the U.S. presidential election.
    Despite the Mexican central bank's action, traders remained
concerned that higher U.S. rates over the coming months could
spark outflows from high-yielding, Latin American bonds. 
    The U.S. Federal Reserve this week increased the number of
rate hikes it expects for next year to three from two, following
Trump's promises of tax cuts and heavy spending. 
    The Brazilian real slipped 0.7 percent, edging back
toward 3.40 to the dollar for the first time in over a week.
    The country's benchmark Bovespa stock index rose 0.7
percent, however, supported by the announcement of a stimulus
package aiming at reducing the debt burden of consumers and
companies amid a deep recession. 
    Brazil's biggest retailer, GPA SA, was among the
biggest gainers on the index, rising as much as 6 percent in
early trading.
       
    Key Latin American stock indexes and currencies at 1500 GMT:
 Stock indexes                                daily %    YTD %
                                               change   change
                                   Latest              
 MSCI Emerging Markets                857.99    -0.08     8.12
 MSCI LatAm                          2266.01     0.49    23.24
 Brazil Bovespa                     58758.00     0.62    35.54
 Mexico IPC                         45645.27    -0.49     6.21
 Chile IPSA                          4239.28     0.35    15.19
 Chile IGPA                         21173.04      0.3    16.65
 Argentina MerVal                   16720.54     -0.1    43.21
 Colombia IGBC                      10046.35     0.14    17.54
 Venezuela IBC                      30224.58    -0.95   107.18
                                                              
 Currencies                                   daily %    YTD %
                                               change   change
                                      Latest           
 Brazil real                          3.3935    -0.68    16.31
 Mexico peso                         20.4330    -0.49   -15.68
 Chile peso                            670.1    -0.61     5.91
 Colombia peso                       2993.25     0.24     5.88
 Peru sol                              3.395     0.21     0.56
 Argentina peso (interbank)          15.9350     0.19   -18.53
                                                       
 Argentina peso (parallel)             16.66     0.00   -14.35
                                                       
 

 (Reporting by Bruno Federowski; Editing by Dan Grebler)

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