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EMERGING MARKETS-LatAm currencies jump after weak U.S. data
June 14, 2017 / 4:07 PM / 6 months ago

EMERGING MARKETS-LatAm currencies jump after weak U.S. data

    SAO PAULO, June 14 (Reuters) - Latin American currencies
strengthened on Wednesday after weaker-than-expected U.S.
economic data further cooled expectations of multiple interest
rate hikes in the second half of the year.
    U.S. retail sales in May recorded their biggest drop in 16
months and consumer prices unexpectedly fell, according to data
released hours before the U.S. Federal Reserve published its
rate-setting decision.
    Traders widely expect the U.S. central bank to hike rates by
a notch on Wednesday, but a mixed batch of economic figures has
cast a shadow on expectations of at least two additional hikes.
    A slower pace of tightening could sustain demand for
emerging market assets, which tend to lure foreign investors
with the promise of higher yields.
    The Brazilian real strengthened 1 percent, the
biggest gainer in the region, while the Mexican peso
firmed 0.7 percent.
    Brazil's benchmark Bovespa stock index inched up 0.3
percent, supported by rising shares of Banco Bradesco SA
 after a federal court cleared the lender's chief
executive offices of illegally dodging a tax fine.
    Strategists at Itaú BBA on Wednesday cut their
recommendation for Brazilian stocks to "underweight" from
"neutral," saying heightened uncertainty over the fate of a
proposed pension reform is likely to lead to higher funding
costs and a weaker currency.
    Strategists upgraded their recommendation on Mexican shares
to "overweight" on forecasts of stronger earnings growth, but
warned of potential volatility around the 2018 presidential
elections and coming NAFTA negotiations.
    Key Latin American stock indexes and currencies at 1555 GMT:
 Stock indexes                             daily %   YTD %
                                            change  change
 MSCI Emerging Markets           1016.21      0.64   17.11
 MSCI LatAm                      2552.47      1.41    7.53
 Brazil Bovespa                 62032.97      0.33    3.00
 Mexico S&P/BMV IPC             49276.07      0.51    7.96
 Chile IPSA                      4878.56     -0.07   17.52
 Chile IGPA                     24417.58     -0.06   17.76
 Argentina MerVal               21324.47     -0.32   26.05
 Colombia IGBC                  10780.07      0.21    6.44
 Venezuela IBC                 107843.20      4.57  240.14
 Currencies                                daily %   YTD %
                                            change  change
 Brazil real                      3.2748      1.01   -0.78
 Mexico peso                     17.9330      0.65   15.68
 Chile peso                        659.8      0.19    1.65
 Colombia peso                   2922.91      0.19    2.69
 Peru sol                          3.269      0.28    4.44
 Argentina peso (interbank)      15.8600      0.19    0.09
 Argentina peso (parallel)         16.44      0.24    2.31

 (Reporting by Bruno Federowski; editing by Grant McCool)

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