September 6, 2019 / 2:31 PM / 12 days ago

EMERGING MARKETS-Latam currencies jump as emerging markets cheer China stimulus

    By Agamoni Ghosh
    Sept 6 (Reuters) - Latin American currencies rose on Friday
as stimulus from China's central bank pumped up emerging
markets, while weaker-than-expected U.S. jobs data reinforced
bets of an interest rate cut by the Federal Reserve later this
month. 
    MSCI's index of Latin American currencies
moved 0.7% higher and was on track to record its best week since
early February.
     China's central bank said on Friday it was cutting the
amount of cash that banks must hold, also known as reserve
requirement ratio (RRR), releasing 900 billion yuan ($126.35
billion) in liquidity to shore up the flagging economy.

    "We expect one more RRR cut to be announced in the final
quarter of 2019 as the trade war continues to hit the Chinese
economy," Iris Pang, economist for greater China at ING, said in
a note. 
    Adding to the risk-on sentiment was an increase in bets for
a rate cut from the Fed next month, after the release of
weaker-than-expected nonfarm jobs data in the U.S. 
    Brazil's real jumped 1%, on track to snap seven
consecutive weeks of losses as the central bank stepped in to
intervene in foreign exchange markets through the week.   
    Data showed consumer price inflation in Brazil was well
contained in August, reinforcing expectations of deeper rate
cuts by the central bank as it tries to fire up economic growth.

    Mexico's peso was on pace to record its best weekly
gains since July 2018, while the Argentine peso was set
to see its first weekly gain in eight weeks after the country
imposed capital controls.
    The Argentine peso has been battered since President
Mauricio Macri suffered a thumping defeat in primaries at the
hands of Alberto Fernandez. 
    Equities in the region moved mostly higher, with Sao Paulo's
Bovespa index up 0.4%, as strong gains by financial
companies help offset losses from energy stocks. 
    In some relief for battered emerging markets, specialist
emerging market investor Ashmore said on Friday it saw its
assets under management grow by 24% for the year ending June 30,
helped by both inflows and positive market performance.


 Latin American stock indexes and currencies at 14:18 GMT
 Stock indexes                            daily % change
                           Latest         
 MSCI Emerging Markets           1008.54            0.55
                                          
 MSCI LatAm                      2682.32            1.12
                                          
 Brazil Bovespa                102649.08             0.4
                                          
 Mexico IPC                     42807.29            0.18
                                          
 Chile IPSA                      4835.07            0.36
                                          
 Argentina MerVal                   0.00               0
                                          
 Colombia IGBC                  12686.85           -0.11
                                          
                                                        
 Currencies                               daily % change
                                  Latest  
 Brazil real                      4.0595            1.22
                                          
 Mexico peso                     19.5717            0.84
                                          
 Chile peso                       710.45            0.70
                                          
 Colombia peso                    3357.1            0.52
 Peru sol                         3.3518            0.36
                                          
 Argentina peso                  55.7000            0.61
 (interbank)                              
                                          
 

 (Reporting by Agamoni Ghosh in Bengaluru; editing by Jonathan
Oatis)
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