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EMERGING MARKETS-LatAm currencies rebound from losses as commodities rise
November 6, 2017 / 3:37 PM / 14 days ago

EMERGING MARKETS-LatAm currencies rebound from losses as commodities rise

    By Bruno Federowski
    SAO PAULO, Nov 6 (Reuters) - Latin American currencies on
Monday rebounded from the previous week's selloff as rising
prices of basic products drove investors to hunt for bargains.
    Currencies from Brazil, Mexico and Chile
 firmed between 0.3 and 0.9 percent after suffering
hefty losses on Friday. Colombian markets were closed due to a
local holiday.
    Upbeat data on U.S. services and manufacturing drove
investors to sell high-yielding assets, betting that U.S.
interest rates could rise faster than expected as the economy
recovered.
    Still, concerns over U.S. President Donald Trump's ability
to pass tax reform plans kicked back on Monday, dampening those
expectations.
    "While tax cuts are not needed for healthy growth, they do
matter," economists at Bank of America Merrill Lynch wrote in a
report.
    "A large unfunded tax cut would likely create a boom-bust
scenario, boosting near-term growth, but forcing a much faster
Fed exit in an attempt to forestall inflation."
    A jump in commodity prices also helped to fuel demand for
currencies from exporters of basic materials, such as oil-heavy
Mexico.
    Crude prices hit their highest since July 2015 on Monday as
Saudi Arabia's crown prince cemented his power over the weekend
with an anti-corruption crackdown, while markets continued to
tighten.
    Shares of Brazilian state-controlled oil company Petrobras
 also rose, while miner Vale SA and
steelmakers Usinas Siderúrgicas de Minas Gerais SA
and Cia Siderúrgica Nacional SA tracked iron ore
prices higher.
    Brazil's benchmark Bovespa stock index rose 0.2
percent, with shares of insurance firm BB Seguridade
Participações SA leading gains following strong
quarterly results.
    Shares of planemaker Embraer SA, however, slipped
1.2 percent as investors booked profits on Friday's gains.
    
    Key Latin American stock indexes and currencies at 1450 GMT:
 Stock indexes                                daily %    YTD %
                                               change   change
                                   Latest              
 MSCI Emerging Markets               1130.40     0.37    30.61
 MSCI LatAm                          2796.70     0.86    18.46
 Brazil Bovespa                     74060.23      0.2    22.97
 Mexico S&P/BVM IPC                 48409.77    -0.26     6.06
 Chile IPSA                          5521.45     0.65    33.00
 Chile IGPA                         27749.77     0.61    33.84
 Argentina MerVal                   27978.33     0.12    65.38
 Venezuela IBC                        709.37    -0.55   -97.76
                                                              
 Currencies                                   daily %    YTD %
                                               change   change
                                      Latest           
 Brazil real                          3.2781     0.85    -0.88
 Mexico peso                         19.0595     0.80     8.84
 Chile peso                            632.3     0.32     6.07
 Peru sol                              3.238     0.15     5.44
 Argentina peso (interbank)          17.6350    -0.54    -9.98
                                                       
 Argentina peso (parallel)             17.96     0.39    -6.35
                                                       
 
 (Reporting by Bruno Federowski)
  

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