April 6, 2018 / 8:54 PM / in a year

EMERGING MARKETS-LatAm currencies down as global trade tensions escalate

 (Updates prices)
    By Bruno Federowski
    BRASILIA, April 6 (Reuters) - Latin American currencies
weakened on Friday after China fought back against a new U.S.
threat to increase tariffs on Chinese goods.
    China warned it was fully prepared to respond with a "fierce
counter strike" of fresh trade measures if the United States
follows through on President Donald Trump's threat to slap
tariffs on an additional $100 billion in Chinese goods.

    The warning came after Trump upped the ante on Thursday by
ordering U.S. officials to identify extra tariffs, escalating a
high-stakes confrontation with potentially damaging consequences
for the world's two biggest economies.
    "It's still a battle of words at this time, but that is
enough to pull down prices," Guide Investimentos analysts wrote
in a client note.
    The currencies of Brazil, Mexico, Chile
 and Peru were down between about 0.1 and 0.9
percent in afternoon trading, despite data showing the U.S.
economy in March created the fewest jobs in six months.
    A weak labor market could drive the Federal Reserve to hike
interest rates at a slower pace than expected in coming months,
potentially boosting the allure of emerging market assets.
    Stock markets were also down across the region due to global
risk aversion, with MSCI's Latin American index
down as much as 1.75 percent, its biggest daily loss in two
months. By mid-afternoon, the index had pared its losses to 1.51
    Brazil's benchmark stock index and Argentina's
MerVal index led the declines, both down 0.81 percent in
afternoon trading. 
    Key Latin American stock indexes and currencies at 1940 GMT:
 Stock indexes                  Latest          Daily   YTD pct
                                                  pct    change
 MSCI Emerging Markets             1,160.98     -0.47      0.69
 MSCI LatAm                        3,028.43     -1.51      8.73
 Brazil Bovespa                   84,522.92     -0.81     10.63
 Mexico IPC                       47,907.83     -0.09     -2.93
 Chile IPSA                        5,583.15     -0.43      0.33
 Chile IGPA                       27,973.86     -0.31     -0.02
 Argentina MerVal                 31,609.38     -0.81      5.13
 Colombia IGBC                    11,798.06     -0.39      3.76
 Venezuela IBC                     6,010.85      2.59    375.87
 Currencies                          Latest     Daily   YTD pct
                                                  pct    change
 Brazil real                         3.3631     -0.65     -1.48
 Mexico peso                        18.3000     -0.52      7.64
 Chile peso                           604.1     -0.09      1.75
 Colombia peso                      2,791.2     -0.04      6.84
 Peru sol                             3.238     -0.37     -0.03
 Argentina peso (interbank)         20.1600      0.19     -7.74
 Argentina peso (parallel             20.59     -1.02     -6.61
 (Reporting by Bruno Federowski
Editing by James Dalgleish)
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