July 13, 2020 / 7:12 PM / a month ago

EMERGING MARKETS-Latam FX weakens, stocks shrug off virus fears

    * Global COVID-19 cases surpass 13 million
    * Chilean central bank seen holding interest rates 
    * Latam stocks rise along with broader markets

 (Adds details, updates prices)
    By Shreyashi Sanyal and Ambar Warrick
    July 13 (Reuters) - Most currencies in Latin America started
the week on the back foot amid increasing coronavirus cases in
the region, while the Chilean peso rose ahead of a policy
meeting later in the week. 
    Brazil's real fell 0.6%, leading declines among
regional peers while oil-linked currencies including the Mexican
 and Colombian pesos tracked weaker crude prices.

    Global coronavirus infections passed 13 million on Monday,
according to a Reuters tally, which also shows the disease
accelerating the fastest in Latin America. The Americas account
for more than half the world's infections and half the deaths.

    While most Latin American currencies have regained some lost
ground from a steep sell-off, heightened dollar demand and
loosening monetary policy have pressured regional players.
    Still, commodity-linked currencies have outperformed in
recent weeks on some improvement in raw material prices.
    Regional stocks rose on the day, tracking a rally in global
equities as markets awaited the U.S. earnings season.
    Chile's peso firmed against the dollar, with
attention shifting toward a policy meeting on Wednesday. Chile's
central bank is expected to leave the benchmark interest rate at
0.5% in July and keep it there for nearly two years.

    Opposition lawmakers in Chile late last week pushed forward
a constitutional reform to allow Chileans to withdraw as much as
10% from their pension funds amid the coronavirus crisis.

    "Chile's central bank is likely to keep rates steady with
the next policy move expected to be a hike sometime closer to
2022," said Edward Moya, senior market analyst at OANDA in New
York. 
    "The focus with Chile has mainly been on the Chamber of
Deputies approval to allow Chileans to tap their retirement
savings. If the bill passes, this could drag down Chilean
stocks, bonds and the peso."
    Santiago stocks rose 2.3%, with miners leading the
charge as prices of copper, Chile's main export, touched their
highest in more than two years.       
    In Costa Rica, President Carlos Alvarado on Sunday said the
nation will begin negotiations with the International Monetary
Fund to access a financial aid package to help offset the
economic blow from the COVID-19 pandemic.
    Argentine stocks rose the most in the region as
markets continued to watch for fresh developments in the
country's debt restructuring talks.
    Ecuador, which is also in the process of restructuring its
sovereign debt, will have to sweeten its offer to creditors,
analysts said.
    
    Key Latin American stock indexes and currencies:
    
    Stock indexes             Latest     Daily % change
 MSCI Emerging Markets         1074.35              0.48
                                        
 MSCI LatAm                    1971.68              0.03
                                        
 Brazil Bovespa              100042.67              0.01
                                        
 Mexico IPC                   36351.37             -0.31
                                        
 Chile IPSA                    4124.64              2.34
                                        
 Argentina MerVal             43913.55             2.728
                                        
 Colombia COLCAP               1150.60              0.25
                                        
                                                        
       Currencies             Latest     Daily % change
 Brazil real                    5.3571             -0.67
                                        
 Mexico peso                   22.5393             -0.43
                                        
 Chile peso                      786.9              0.70
                                        
 Colombia peso                 3619.24             -0.32
 Peru sol                       3.4968              0.14
                                        
 Argentina peso                71.2300             -0.41
 (interbank)                            
                                        
 
    

 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Tom
Brown)
  
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