November 20, 2019 / 3:55 PM / a month ago

EMERGING MARKETS-Latam FX weakens as Hong Kong bill sparks trade jitters

    * U.S. bill on Hong Kong human rights angers China
    * Trump threatens to raise tariffs on Chinese imports
    * Chile peso slides again as protests rage on
    * Mexican peso, Colombian peso ease

    By Sagarika Jaisinghani
    Nov 20 (Reuters) - Latin American currencies eased on
Wednesday as concerns about flaring U.S.-China trade tensions
kept investors from buying into riskier assets, while the
Chilean peso extended losses for the third day in a row as
anti-government protests showed no signs of letting up. 
    Global stocks retreated from 22-month highs and the dollar
edged higher as a U.S. bill meant to protect human rights in
Hong Kong amid pro-democracy protests angered China, adding to
jitters from a threat by U.S. President Donald Trump to raise
tariffs on Chinese imports if a deal was not reached soon.

    The Mexican peso fell 0.6% and the Colombian peso
 dipped 0.2%.
    "Hong Kong has become an even bigger thorn in the already
complicated trade talks between the U.S. and China," said Piotr
Matys, senior emerging markets FX strategist at Rabobank.
    "The (bill) could slow down the process of reaching an
agreement, but one should not over react and assume that it
could become an impenetrable obstacle."
    A basket of Latin American currencies is on
track for its first monthly decline in three, also pressured by
unsuccessful oil auctions in Brazil and prolonged civil unrest
in Chile.
    Chile's peso shed 1.3%, erasing all its gains from
Friday, when lawmakers yielded to demands of protesters and
agreed to hold a referendum to overhaul the country's
dictatorship-era constitution. 
    The currency, which has lost over 9% since Oct. 21 when
protesters turned to vandalism, also looked past a rise in
copper prices after top consumer China cut interest rates to
shore up growth. Chile is the world's biggest producer of the
red metal.
    The country's stock index fell 0.4%, while
Argentina's MerVal index was up 2.2%.
    Mexico shares inched up 0.1%, partly lifted by
Mexican cement maker Cemex, which said late on
Tuesday that its corporate venture capital unit would enter the
Chinese market by partnering with two local firms.
    A Reuters poll that showed annual inflation in Mexico likely
accelerated slightly in the first half of November, in part due
to an end in government power subsidies used for air
conditioning during the hot season.
    Focus now turns to announcements from central banks for
clues on monetary policy. Minutes from the U.S. Federal
Reserve's latest policy meeting are due on Wednesday, while
European Central Bank chief Christine Lagarde delivers her first
major speech on Wednesday.
    Financial markets in Brazil were closed for a local holiday.
    
    Key Latin American stock indexes and currencies at 1520 GMT:
    
     Stock indexes              Latest     Daily % change
 MSCI Emerging Markets           1052.01             -0.49
                                          
 MSCI LatAm                      2664.09              0.24
                                          
 Brazil Bovespa                        -                 -
                                          
 Mexico IPC                     43647.71               0.1
                                          
 Chile SPIPSA                    4772.89              -0.4
                                          
 Argentina MerVal               32972.91             2.233
                                          
 Colombia IGBC                         -                 -
                                          
                                                          
        Currencies              Latest     Daily % change
 Brazil real                           -                 -
                                          
 Mexico peso                     19.4586             -0.63
                                          
 Chile peso                        794.2             -0.91
                                          
 Colombia peso                   3446.62             -0.28
 Peru sol                         3.3858             -0.29
                                          
 Argentina peso (interbank)      59.7200             -0.04
                                          
 
 (Reporting by Sagarika Jaisinghani and Shreyashi Sanyal in
Bengaluru)
  
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