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EMERGING MARKETS-Brazil real weakens on fiscal jitters, Trump tax plan eyed
April 26, 2017 / 4:17 PM / 8 months ago

EMERGING MARKETS-Brazil real weakens on fiscal jitters, Trump tax plan eyed

    By Bruno Federowski
    SAO PAULO, April 26 (Reuters) - The Brazilian real weakened
on Wednesday after lawmakers voted to water down the austerity
demands in a states debt relief bill, fueling concerns over the
government's fiscal agenda.
    The lower house of Congress approved late on Tuesday
scrapping a requirement that states increase charges on public
employees to fund their pensions in exchange for suspending debt
payments for three years.
    The move invited worries that President Michel Temer's
administration might find it harder than expected to gather
support for a revamp of the country's bloated pension system, at
the center of its reform agenda.
    Cutting public spending and curbing growth of public debt is
seen as key to lifting Brazil out of its deepest recession on
record.
    The Brazilian real weakened 1.5 percent, among the
biggest decliners in Latin American currency markets, which
slipped for a second day on bets U.S. President Donald Trump's
tax-cutting plans could force U.S. interest rates to rise
faster.
    Trump will release a tax plan on Wednesday that proposes to
sharply slash rates on businesses and overseas corporate profits
returned to the United States, officials said.
    The proposals are expected to be unveiled at the White House
at 1:30 ET (1730 GMT) on Wednesday by Treasury Secretary Steve
Mnuchin and Trump economic adviser Gary Cohn.
    The Mexican peso, which has been especially
vulnerable to political developments in the United States, fell
1.5 percent. 
    The country expects to start renegotiating the North
American Free Trade Agreement (NAFTA), which Trump has pledged
to scrap, in late August and talks should be completed within
six months, Mexico's economy minister said on Wednesday.

    
    Key Latin American stock indexes and currencies at 1600 GMT:
 Stock indexes                                 daily %   YTD %
                                     Latest     change  change
 MSCI Emerging Markets                980.24     -0.25   13.96
 MSCI LatAm                          2595.85     -1.45   12.54
 Brazil Bovespa                     65205.77      0.09    8.27
 Mexico IPC                         49231.52     -1.16    7.86
 Chile IPSA                          4840.29     -0.57   16.59
 Chile IGPA                         24309.17     -0.51   17.24
 Argentina MerVal                   21176.32      -0.1   25.17
 Colombia IGBC                      10195.34      0.22    0.66
 Venezuela IBC                      59058.46      7.53   86.27
                                                              
 Currencies                                    daily %   YTD %
                                                change  change
                                      Latest            
 Brazil real                          3.1969     -1.50    1.64
 Mexico peso                         19.1470     -1.50    8.34
                                                        
 Chile peso                            665.2     -0.51    0.83
 Colombia peso                       2928.01     -0.99    2.51
 Peru sol                               3.25     -0.15    5.05
 Argentina peso (interbank)          15.4350     -0.10    2.85
                                                        
 Argentina peso (parallel)             16.02      0.50    4.99
                                                        
 

 (Reporting by Bruno Federowski; Editing by Chris Reese)
  

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