June 7, 2019 / 2:15 PM / 2 months ago

EMERGING MARKETS-Most Latam FX firm; Mexican peso awaits tariff news from third day of talks

    By Susan Mathew
    June 7 (Reuters) - Most Latin American currencies firmed on
Friday as the dollar was pressured by much weaker-than-expected
U.S. jobs data, while Mexico's peso was little changed ahead of
trade and migration talks between Mexico and United States set
to resume for a third day.
    The greenback slid after data showed that U.S. job growth
slowed sharply in May and wages rose less than expected, making
a stronger case for an interest rate cut by the central bank.

    Brazil's real climbed 0.3%, while the Chilean peso
 was steady ahead of a central bank rate meeting. The bank
is expected to keep the benchmark borrowing rate unchanged at
3%.
    Colombia's peso firmed 0.1%, on track to end a
seven-week losing run and gain around 3% this week - its best
since February last year.
    Mexico's peso was marginally lower, as investors
awaited signs of concrete progress from the U.S.-Mexico talks on
Friday.
    Mexico has ramped up efforts to curb the flow of migrants
into the United States via its border, but it is unclear if the
efforts will be enough to persuade U.S. President Trump to do
away with or postpone a 5 percent tariff set to take effect on
Monday.
    "Based on comments from the Trump administration, it's
difficult to be optimistic that tariffs will be delayed," said
Pilot Matys, emerging market FX strategist at Rabobank. 
    The peso has fallen 3%  since Trump's tariff threat late
last week and a Reuters poll showed that tariffs could take the
peso down to its lowest point this year.
    Mexico suffered another blow on Thursday, when rating agency
Fitch downgraded the debt of Mexican state oil company Pemex to
"junk." The day before Fitch had downgraded Mexico's sovereign
credit rating, citing risks from Pemex and trade tensions.

    Among stocks, Sao Paulo-traded shares rose 0.4% and
were set to extend gains to a third week.
    Shares of state-run oil company Petroleo Brasileiro
(Petrobras) were the biggest boost.
Brazil's Supreme Court ruled on Thursday that state-run
companies do not need congressional approval to sell their
subsidiaries, allowing Petrobras to go ahead with planned
divestitures.
    
    Key Latin American stock indexes and currencies at 1342 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1005.22      0.25
                                        
 MSCI LatAm                    2730.86      0.67
                                        
 Brazil Bovespa               97579.97      0.39
                                        
 Mexico IPC                          -         -
                                        
 Chile IPSA                    4931.18      0.09
                                        
 Argentina MerVal                    -         -
                                        
 Colombia IGBC                       -         -
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.8683      0.35
                                        
 Mexico peso                   19.7140     -0.15
                                        
 Chile peso                      692.9     -0.10
                                        
 Colombia peso                  3284.1      0.13
 Peru sol                        3.336      0.00
                                        
 Argentina peso                      -         -
 (interbank)                            
                                        
 

 (Reporting by Susan Mathew in Bengaluru;)
  
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