EMERGING MARKETS-Colombian peso skyrockets on higher oil prices, Fed
SAO PAULO, Dec 18 (Reuters) - Colombia's peso soared on Thursday after the price of oil, the country's main export, extended a rebound from five-year lows. Other Latin American currencies followed suit as an upbeat assessment of the U.S. economy by the Federal Reserve on Wednesday helped offset mounting concerns over the recent decline in oil prices and a potential financial crisis in Russia. Colombia's peso posted its biggest intraday gain in nearly four years, strengthening to 2,324 per dollar, a gain of around 3 percent, before slightly paring gains to trade at 2,342, or about 2.3 percent higher than Wednesday's close. Fuel makes up about 69 percent of the country's merchandise exports, according to 2013 World bank data. "This has to do with oil prices and the Fed, it's all helping reduce risk aversion," said Sebastián Díaz, an analyst with Banco de Bogotá. The Fed also signaled on Wednesday that it would take a slow-going approach to rate hikes despite the strengthening U.S. economy, reducing concerns in Latin American markets over a sharper or sooner-than-expected interest rate rise. The Brazilian real strengthened for the second straight session after hitting its weakest level against the dollar in nearly 10 years on Tuesday. Traders continued to cite risks, however, over the future of the central bank's currency intervention program, which is due to be modified in 2015. The bank has helped support the real by providing hedging protection to local businesses via currency swaps, though it remains unclear how the program will be scaled down next year. Chile's peso also gained for a second day despite lower prices for copper, the country's main export. Equities markets moved higher, with the MSCI Latin American stock index up 2 percent. Brazil's Bovespa stock index rallied for a second day, driven by shares of state-run oil producer Petroleo Brasileiro SA . The stock has been hammered in recent months by an ongoing corruption investigation, but a combination of bargain-hunting and rising oil prices have supported the shares since Tuesday. Key Latin American stock indexes and currencies at 1401 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 935.06 1.84 -8.43 MSCI LatAm 2664.33 2.01 -18.4 Brazil Bovespa 49288.71 1.18 -4.31 Mexico IPC - - -100.00 Chile IPSA 3841.8 1.66 3.86 Chile IGPA 18822.38 1.51 3.27 Argentina MerVal - - -100.00 Colombia IGBC 10930.47 - -16.38 Peru IGRA 14144.64 -0.03 -10.21 Venezuela IBC 3940.78 - 44.00 Currencies daily % YTD % change change Latest Brazil real 2.6605 1.53 -11.42 Mexico peso 14.4897 0.55 -10.07 Chile peso 613 0.69 -14.18 Colombia peso 2337.2 2.63 -17.34 Peru sol 2.945 0.20 -5.16 Argentina peso 8.5575 -0.03 -24.13 (interbank) Argentina peso 13.05 0.77 -23.37 (parallel) (Reporting by Asher Levine; Additional reporting by Nelson Bocanegra in Bogota Editing by W Simon)
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