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EMERGING MARKETS-Mexico peso tumbles on report U.S. mulling NAFTA exit
April 26, 2017 / 6:47 PM / 8 months ago

EMERGING MARKETS-Mexico peso tumbles on report U.S. mulling NAFTA exit

 (Recasts with peso losses, updates prices)
    MEXICO CITY, April 26 (Reuters) - Mexico's peso sank to a
more than one-month low on Wednesday on news the administration
of U.S. President Donald Trump was considering pulling out of
the North American Free Trade Agreement (NAFTA).
    A senior Trump administration official said on Wednesday a
draft executive order that would withdraw the United States from
NAFTA, that also includes Mexico and Canada, was under
consideration, confirming an earlier report from Politico.

    It is unclear whether the order would be enacted by Trump,
who has said NAFTA undermines U.S. jobs. Mexico-based factories
have flourished under NAFTA and Mexico sends nearly 80 percent
of its exports to the United States. 
    The peso shed more than 2 percent before paring losses
slightly to trade down about 1.6 percent at 19.17 per dollar.
    Concerns that Trump would pull out of NAFTA drove the peso
to a record low in January. But the currency had rallied back as
Mexican and U.S. officials took a more constructive tone on
trade since then.
    The Brazilian real weakened more than 0.7 percent after
lawmakers voted to water down austerity demands in a debt relief
bill for states, fueling concerns over the government's fiscal
    The lower house of Congress approved late on Tuesday
scrapping a requirement that states increase charges on public
employees to fund their pensions in exchange for suspending debt
payments for three years.
    The move invited worries President Michel Temer might find
it harder than expected to gather support for a revamp of the
country's bloated pension system, an overhaul at the center of
his reform agenda.
    Cutting public spending and curbing growth of public debt is
seen as key to lifting Brazil out of its deepest recession on
    Key Latin American stock indexes and currencies at 1800 GMT:
 Stock indexes                    Latest      Daily     YTD
                                                pct     pct
                                             change  change
 MSCI Emerging Markets               980.16   -0.25   13.96
 MSCI LatAm                        2,598.55   -1.35   12.54
 Brazil Bovespa                   64,986.22   -0.25    7.90
 Mexico IPC                       49,407.17    -0.8    8.25
 Chile IPSA                        4,836.24   -0.65   16.50
 Chile IGPA                       24,288.99   -0.59   17.14
 Argentina MerVal                 21,084.22   -0.54   24.63
 Colombia IGBC                    10,153.44    -0.2    0.25
 Venezuela IBC                    61,296.16    11.6   93.33
 Currencies                          Latest   Daily     YTD
                                                pct     pct
                                             change  change
 Brazil real                         3.1490   -0.74    3.18
 Mexico peso                        19.1700   -1.62    8.21
 Chile peso                             665   -0.48    0.86
 Colombia peso                     2,928.17   -0.99    2.50
 Peru sol                             3.249   -0.12    5.08
 Argentina peso (interbank)         15.4900   -0.45    2.49
 Argentina peso (parallel)            16.01    0.56    5.06
 (Reporting by Michael O'Boyle in Mexico City and Bruno
Federowski in Sao Paulo; Editing by Andrew Hay)

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