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EMERGING MARKETS-Mexico peso slips on NAFTA fears, other Latam currencies gain
October 13, 2017 / 8:40 PM / 2 months ago

EMERGING MARKETS-Mexico peso slips on NAFTA fears, other Latam currencies gain

 (Recasts with peso weakening)
    By Bruno Federowski
    SAO PAULO, Oct 13 (Reuters) - Mexico's peso
hit a fresh five-month low on Friday on concerns over Mexico's
future commerce ties with top trade partner the United States,
while other Latin American currencies strengthened. 
    The Trump administration on Friday demanded that U.S.-made
content account for half the value of the cars and trucks sold
under the North American Free Trade Agreement (NAFTA), adding to
 doubts about any potential deal to renew the pact.
    The proposal was made during talks near Washington, in the
fourth of seven planned rounds of negotiations to overhaul the
treaty. Mexican sources denounced it as "absurd" and
unacceptable, underlining the gaps between NAFTA's three members
as they try to wrap up a deal by a year-end deadline.
    The peso, which has weakened as concern for the future of
NAFTA has grown, dropped around 0.25 percent.
    In central bank minutes published on Thursday, a majority of
board members recommended maintaining a prudent monetary policy
stance due to "adverse scenarios" in Mexican-U.S. ties, which
could heighten risks for economic growth and the peso.

    Other Latin American currencies firmed after underlying U.S.
inflation remained tame in September, casting doubt over the
prospect of a December Federal Reserve interest rate hike.
    The currencies of Brazil, Chile and Colombia
 firmed between 0.1 and 0.7 percent, supported by
expectations that a slow path of U.S. rate hikes could bolster
demand for high-yielding assets.
    Brazil's benchmark Bovespa stock index rose 0.43
percent and hovered around the 77,000 mark, tracking commodity
prices higher after stronger-than-expected Chinese trade
figures. 
    Preferred shares in Oi SA jumped 23.76 percent
after the phone company submitted a debt restructuring plan seen
as strongly beneficial to stockholders.
    Still, analysts warned the plan may not be approved by
creditors, who could be forced to take heavy losses on their
holdings.    

    Key Latin American stock indexes and currencies at 2021 GMT:
    
 Stock indexes             Latest        Daily   YTD pct
                                           pct    change
                                        change  
 MSCI Emerging Markets      1,126.96      0.48     30.08
                                                
 MSCI LatAm                 2,966.12      0.53     26.05
                                                
 Brazil Bovespa            76,977.68      0.43     27.81
 Mexico IPC                49,969.50      0.01      9.48
 Chile IPSA                 5,460.47      0.47     31.53
 Chile IGPA                27,343.11      0.45     31.87
 Argentina MerVal          27,108.55      0.18     60.24
 Colombia IGBC             11,057.99     -0.03      9.18
 Venezuela IBC                534.01      0.36    -98.32
                                                        
 Currencies                   Latest     Daily   YTD pct
                                           pct    change
                                        change  
 Brazil real                  3.1482      0.66      3.21
                                                
 Mexico peso                 18.9575     -0.30      9.42
 Chile peso                    622.8      0.22      7.69
 Colombia peso               2,933.2      0.22      2.33
 Peru sol                      3.248      0.15      5.11
 Argentina peso              17.3300      0.52     -8.40
 (interbank)                                    
 Argentina peso                17.85      0.22     -5.77
 (parallel)                                     
 
 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli)
  

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