September 1, 2017 / 4:22 PM / in 3 months

EMERGING MARKETS-LatAm currencies strengthen as U.S. wage growth slows

    By Bruno Federowski
    SAO PAULO, Sept 1 (Reuters) - Latin American currencies
strengthened on Friday after U.S. wage growth eased, fueling
bets that the Federal Reserve will not raise interest rates this
year.
    U.S. average hourly earnings rose rose just 0.1 percent in
August after two months of stronger gains, data showed on
Firday, adding to concerns over sluggish inflation that remains
far below the Fed's 2 percent target.
    A slower path of U.S. rate hikes may sustain demand for
high-yielding assets in emerging markets, bolstering the value
of their currencies.
    "Real economic activity is solid but price and wage
pressures remain weak," Citigroup strategists wrote in a client
note. "Markets, and the Fed, will remain in 'wait and see'
mode."
    Currencies from Brazil, Mexico and Colombia
 firmed around 0.5 percent.
    Gains in the Chilean peso were limited by bets on
interest rate cuts later in the year after minutes from the
central bank's last policy meeting showed one policymaker voted
for a reduction.
    The peso has rallied in recent weeks as copper prices
soared, feeding expectations of easing inflationary pressure.
    Brazil's benchmark Bovespa stock index rose 1.8
percent, also helped by stronger-than-expected economic growth
in the second quarter that suggested a recovery from the deepest
recession in a century remained on track.
    Shares of BRF SA, the world's largest chicken
exporter, rose 2.5 percent after it announced Chief Executive
Pedro de Andrade Faria plans to leave by the end of the year,
following a series of heavy quarterly losses. 
    
    Key Latin American stock indexes and currencies at 1600 GMT:
 Stock indexes                                 daily %   YTD %
                                      Latest    change  change
 MSCI Emerging Markets                1091.76     0.37   26.14
 MSCI LatAm                           2913.78     1.42   22.75
 Brazil Bovespa                      72077.81     1.75   19.68
 Mexico S&P/BVM IPC                  51214.79     0.01   12.21
 Chile IPSA                           5148.89    -0.08   24.03
 Chile IGPA                          25711.35    -0.06   24.00
 Argentina MerVal                    23677.21     0.37   39.95
 Colombia IGBC                       11100.22     0.47    9.60
 Venezuela IBC                      235414.30        0  642.51
                                                              
 Currencies                                    daily %   YTD %
                                                change  change
                                       Latest           
 Brazil real                           3.1323     0.47    3.73
 Mexico peso                          17.7865     0.55   16.63
 Chile peso                            624.15     0.07    7.46
 Colombia peso                        2933.16     0.48    2.33
 Peru sol                               3.238     0.03    5.44
 Argentina peso (interbank)           17.2350     0.49   -7.89
                                                        
 Argentina peso (parallel)              18.11     0.83   -7.12
                                                        
 
 (Reporting by Bruno Federowski; Editing by Alistair Bell)
  

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