EMERGING MARKETS-Brazil, Mexico currencies gain on U.S. jobs data
RIO DE JANEIRO, Jan 9 (Reuters) - The currencies of Brazil and Mexico strengthened on Friday after data showed U.S. wages unexpectedly fell in December, increasing expectations that the Federal Reserve will be "patient" before raising interest rates. Brazilian stocks led declines in Latin America, however, amid losses in the power sector and a selloff on Wall Street. Shares of Brazilian power distributors slumped on concern about rising costs after a prolonged drought caused hydroelectricity prices to soar. The Brazilian real closed 1.3 percent stronger while the Mexican peso climbed 0.5 percent after a report showed U.S. workers' earnings dropped even as employers continued to add jobs in December. "It's clear that the market doesn't have to worry about higher U.S. rates at least for a few months," said Reginaldo Siaca, head of currency trading at TOV brokerage in Brazil. An expected rise in U.S. interest rates will be one of the main challenges for Latin American markets this year as many investors will likely ditch emerging markets in favor of U.S. Treasuries. The Colombian peso lost 0.8 percent as oil prices resumed their slide, clouding the economic outlook for the oil-exporting country. In equity markets, Brazil's benchmark Bovespa index lost 2.2 percent as shares of power utilities Tractebel , Light, Eletrobras dropped at least 7 percent. Power utilities' costs have soared in Brazil as the worst drought in 80 years drove hydroelectricity prices sharply higher. Much of the industry would already be bankrupt if the government had not provided them with 17.8 billion reais ($6.76 billion) worth of emergency credit last year. Now, Brazil's state development bank BNDES is willing to make another emergency loan to electricity distributors as long as two other state-run lenders join the operation, a senior bank executive told Reuters. Key Latin American stock indexes and currencies at 2030 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging 962.3 0.36 0.26 Markets MSCI LatAm 2687.35 -0.04 -1.44 Brazil Bovespa 48840.25 -2.21 -2.33 Mexico IPC 42443.13 0.1 -1.63 Chile IPSA 3783.06 -0.07 -1.76 Chile IGPA 18608.54 -0.06 -1.39 Argentina MerVal 8459.649 0.76 -1.39 Colombia IGBC 10934.55 -0.22 -6.02 Peru IGRA 14419.52 -0.09 -2.53 Venezuela IBC 3950.49 -0.09 2.38 Currencies daily % YTD % change change Latest Brazil real 2.6375 1.29 0.76 Mexico peso 14.6012 0.47 0.98 Chile peso 615 -0.41 -1.40 Colombia peso 2416 -0.81 -1.16 Peru sol 2.987 -0.23 -0.27 Argentina peso 8.5900 0.03 -0.47 (interbank) Argentina peso 13.72 0.36 2.04 (parallel) (Reporting by Bruno Federowski and Walter Brandimarte; Editing by Nick Zieminski)
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