EMERGING MARKETS-Latam currencies drop on U.S. rates outlook, Moody's Brazil call
SAO PAULO, Sept 9 (Reuters) - Latin American currencies weakened on Tuesday as investors changed their outlook on U.S. interest rates, while Brazilian markets also reacted to a warning from Moody's on the outlook for the country's credit rating. The broader MSCI Latin American stock index fell its most in over two weeks, mostly due to a decline in Mexican shares. The dollar gained worldwide on Tuesday after a research document published Monday by the San Francisco Federal Reserve suggested U.S. interest rates could rise sooner than many in the market had expected. All Latin American currencies weakened in response. The Chilean peso weakened its most in over a week, also weighed down by a sharp decline in prices for copper , the country's main export. Colombia's peso dropped its most since late July. Colombia's government is proposing to raise its tax on capital gains and to extend a financial transactions tax, Finance Minister Mauricio Cardenas said on Monday. The Brazilian real and the Bovespa stock index both dropped after Moody's Investors Service said it may cut Brazil's credit rating in the next couple of years because of a slow economy. The move was "not entirely unexpected, especially after Standard & Poor's downgraded Brazil's rating by one notch to BBB- in March," wrote Citi analyst Kenneth Lam in a client note. "It should not be a big deal but (it's) obviously not helping sentiment today." Mexico's IPC stock index dropped the most in about five weeks as investors took profits the day after the index reached an all-time high. Telecommunications firm America Movil fell about 1.5 percent and contributed most to the index's decline. Key Latin American stock indexes and currencies at 1610 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1085.58 -0.86 9.21 MSCI LatAm 3532.91 -1.84 12.45 Brazil Bovespa 58883.02 -0.52 14.32 Mexico IPC 45954.35 -0.87 7.55 Chile IPSA 4057.44 -0.06 9.68 Chile IGPA 19663.29 -0.05 7.88 Argentina MerVal 10670.869 0.16 97.94 Colombia IGBC 14355.84 -0.72 9.83 Peru IGRA 17217.42 -0.18 9.29 Venezuela IBC 2675.58 0.74 -2.23 Currencies daily % YTD % change change Latest Brazil real 2.2835 -0.85 3.21 Mexico peso 13.2095 -0.54 -1.36 Chile peso 591 -0.73 -10.98 Colombia peso 1964.49 -0.92 -1.65 Peru sol 2.856 -0.14 -2.21 Argentina peso 8.4000 0.06 -22.71 (interbank) Argentina peso 14.25 0.00 -29.82 (parallel) (Reporting by Asher Levine; Editing by Grant McCool)
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