EMERGING MARKETS-Brazil's real sinks as central bank reduces intervention

viernes 2 de enero de 2015 10:17 GYT
 

By Bruno Federowski
    SAO PAULO, Jan 2 (Reuters) - Brazil's real  
weakened on Friday after the central bank reduced the size of a
market intervention program that has helped buffer the
currency's losses against the dollar.
    The Brazilian central bank on Tuesday announced it will
continue to intervene in the foreign exchange market at least
until the end of March, though it halved the supply of currency
hedges it offers on a daily basis to support the real. 
    The bank will now sell as much as $100 million worth of
currency swaps in daily auctions from Mondays through Fridays,
down from $200 million previously.
    "The change in the central bank program makes it clear that,
with the exchange rate at these levels, it's not going to fight
(for a stronger real)," said Reginaldo Siaca, head of currency
trading at the TOV brokerage in Sao Paulo.
    A slowdown in Brazil's economy, coupled with falling
commodity prices and a strengthening U.S. economy, led the real
to a 12.5 percent loss against the dollar in 2014.
    Siaca added that thin trading due to the New Year's holiday
and a strengthening global dollar added to the day's move, which
saw the real lose as much as 1.71 percent against the dollar.
    Brazil's currency market was closed on Wednesday and
Thursday for the holiday.
    Other Latin American currencies weakened as well, with
Chile's peso down over 1 percent and Mexico's peso 
falling about 0.5 percent.
    Brazil's Bovespa stock index sank for the second
straight session, weighed down by shares of state-run oil
company Petroleo Brasileiro SA and mining firm Vale
SA. Both stocks have suffered from sliding prices for
petroleum and iron-ore .IO62-CNI=SI in recent months.
    
    Key Latin American stock indexes and currencies at 1406 GMT:
    
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets          955.92     -0.04     -0.04
                                                  
 MSCI LatAm                    2684.29     -1.59         0
                                                  
 Brazil Bovespa               49647.83     -0.72     -0.72
                                                  
 Mexico IPC                          -         -         -
                                                  
 Chile IPSA                    3853.82      0.07      0.07
                                                  
 Chile IGPA                   18881.36      0.06      0.06
                                                  
 Argentina MerVal                    -         -         -
                                                  
 Colombia IGBC                11634.63         -         -
                                                  
 Peru IGRA                           -         -         -
                                                  
 Venezuela IBC                 3898.81      1.04     42.47
                                                  
                                                          
 Currencies                              daily %     YTD %
                                          change    change
                                Latest            
 Brazil real                    2.7028     -1.69     -1.69
                                                  
 Mexico peso                    14.824     -0.52     -0.52
                                                  
 Chile peso                      612.3     -1.07     -1.07
                                                  
 Colombia peso                    2393     -0.21     -0.21
 Peru sol                        2.979         -         -
                                                  
 Argentina peso                 8.5500      0.03      0.03
 (interbank)                                      
                                                  
 Argentina peso                     14     -1.93     -1.93
 (parallel)                                       
                                                  
 
 (Writing by Asher Levine Editing by W Simon)