EMERGING MARKETS-Latam currencies weaken on Fed outlook
SAO PAULO, Jan 29 (Reuters) - Latin American currencies weakened against the dollar on Thursday after the U.S. Federal Reserve maintained an optimistic outlook for the world's largest economy and signaled it was on track to raise interest rates in 2015. Equity markets were broadly lower, with the MSCI Latin American stock index slipping for the fourth session in five. The Fed on Wednesday said the U.S. economy was expanding "at a solid pace" with strong job gains, fueling expectations that it would not postpone an expected interest rate hike this year. Higher U.S. interest rates are expected to drive funds out of riskier emerging markets and contribute to currency weakness in the region. "It's clear that the U.S. economy is going to have to look much worse for the Fed to decide to postpone a rate hike," said Reginaldo Galhardo, head of currency trading at brokerage Treviso in Sao Paulo. The Brazilian real weakened its most in over a week, while the Colombian peso fell its most since early January. Chile's peso flirted with six-year lows, tracking a nearly 2 percent fall in the price for copper, the country's main export. In equity markets, Brazil's Bovespa stock index added to the previous session's losses, again weighed down by shares of state-run oil firm Petrobras. Shares of the company formally known as Petroleo Brasileiro SA have lost about 62 percent of their value since the start of September on concerns about government intervention in the company and an ongoing multibillion-dollar corruption investigation. Mexico's IPC stock index and Chile's IPSA stock index also posted modest losses. Key Latin American stock indexes and currencies at 1616 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 971.14 -1.37 2.96 MSCI LatAm 2640.07 -1.27 -1.97 Brazil Bovespa 47589.09 -0.22 -4.84 Mexico IPC 41894.42 -0.63 -2.90 Chile IPSA 3836.06 -0.24 -0.39 Chile IGPA 18770.26 -0.23 -0.53 Argentina MerVal 8526.159 -2.8 -0.62 Colombia IGBC 10628.95 -0.63 -8.64 Peru IGRA 13531.04 -0.73 -8.54 Venezuela IBC 3880.32 0.02 0.56 Currencies daily % YTD % change change Latest Brazil real 2.6075 -1.25 1.92 Mexico peso 14.8382 -0.60 -0.63 Chile peso 627.2 -0.59 -3.32 Colombia peso 2407.85 -1.86 -0.82 Peru sol 3.048 -0.56 -2.26 Argentina peso 8.6325 0.00 -0.96 (interbank) Argentina peso 13.63 0.88 2.71 (parallel) (Reporting by Bruno Federowski; Editing by Jonathan Oatis)
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