November 15, 2017 / 11:23 PM / a year ago

EMERGING MARKETS-Mexico peso tumbles to eight-month low on NAFTA worries

    MEXICO CITY, Nov 15 (Reuters) - Mexico's peso sank to an
eight-month low on Wednesday, hurt by concerns that the latest
round of talks to overhaul the North American Free Trade
Agreement (NAFTA) would fail to make much headway in the face of
tough U.S. demands.
    Mexico's peso was down by as much as 0.9 percent, touching
its weakest level since mid-March, before closing 0.31 percent
    Lower level negotiators from the United States, Canada and
Mexico started a fifth round of NAFTA talks in Mexico City on
Wednesday, but expectations for major advances were low.

    "Due to the wide distances between the sides, it is
improbable that they make very substantial advances in this
meeting," said Mario Castro, a strategist at Nomura in New York.
    "The market had gotten a little too optimistic and it is
coming back to reality," he said.
    In the last round, in October, Washington made several
proposals, including minimum U.S. content rules for automobiles,
that Canada and Mexico rejected outright and that could derail
hopes for an agreement.
    Other Latin American currencies saw more modest losses after
U.S. data showed a surprise rise in retail sales last month as
well as an uptick in underlying inflation, cementing
expectations for an interest rate hike in December.
    The region's biggest market, Brazil, was closed for a local
    Higher U.S. interest rates could lure yield-hungry investors
out of emerging market assets, which are seen as riskier.
    Mexico's stock market was little changed after
closing at its lowest since March in the previous session.
Mexican stocks have slumped after a weak batch of corporate
reports on third quarter earnings. 
    Shares of Mexican low-cost airline Volaris fell
about 1.7 percent, paring back losses slightly that took shares
to their lowest since late May 2015 after preliminary deal to
buy 80 Airbus jets.
    Latin American stock indexes at 2300 GMT:
 Stock indexes                  Latest     Daily pct  YTD pct
                                              change   change
 MSCI Emerging Markets           1,111.12      -0.64    28.86
 MSCI LatAm                      2,677.82      -0.47     14.4
 Brazil Bovespa                 70,826.59      -2.27    17.60
 Mexico IPC                     47,690.80      -0.38     4.49
 Chile IPSA                      5,273.77      -0.66    27.04
 Chile IGPA                     26,588.18      -0.64    28.23
 Argentina MerVal               26,312.68       2.74    55.53
 Colombia IGBC                  10,693.68       0.25     5.58
 Venezuela IBC                     660.68      -0.17   -97.92
 (Reporting by Michael O'Boyle; editing by Diane Craft)
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