EMERGING MARKETS-Brazil's real extends fall, crosses 2.87 mark on retail data
SAO PAULO, Feb 11 (Reuters) - The Brazilian real dropped more than 1 percent on Wednesday on disappointing monthly retail sales data, dragging the embattled currency further past 10-year lows. Other Latin American currencies weakened as well, with the Colombian and Mexican pesos hit by a decline in oil prices. Equities markets were broadly lower, with the MSCI Latin American stock index sinking to its lowest level in nearly two months. Brazil's real fell as low as 2.8750 per dollar on Wednesday after data showed that retail sales declined at the sharpest pace on record in December, capping their weakest year since 2003. Ongoing concerns about the deterioration of Brazil's economy, combined with expectations of higher U.S. interest rates, have contributed to the real's roughly 6 percent fall in February. Brazil's inflation expectations continue to climb, while economic growth forecasts increasingly point to another recession in Latin America's largest economy this year. Investors are wary that the economic slowdown could loosen the government's commitment to making the fiscal adjustments the country is believed to need to ward off a credit downgrade, which could lead to a sharp outflow of portfolio investments. Part of the real's recent losses also are due to stop-loss operations triggered by the currency's decline, traders said. Elsewhere in Latin America, Mexico's peso fell to its weakest level since March of 2009, partly weighed down by disappointing industrial output data. Lower oil prices also contributed to the currency decline, but more sharply in Colombia, where the peso fell by the most in nearly two weeks. Petroleum is Colombia's main export. Brazil's Bovespa stock index fell slightly, though shares of railway operator America Latina Logistica SA surged after antitrust regulator Cade approved its takeover by Rumo Logistica. Key Latin American stock indexes and currencies at 1521 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 959.33 -0.78 1.1 MSCI LatAm 2516.57 -2.09 -5.77 Brazil Bovespa 48151.79 -0.74 -3.71 Mexico IPC 42216.48 -0.98 -2.15 Chile IPSA 3911.7 0.16 1.58 Chile IGPA 19057.64 0.13 0.99 Argentina MerVal 9005.859 -0.12 4.98 Colombia IGBC 10601.52 -0.86 -8.88 Peru IGRA 13542.45 -0.08 -8.46 Venezuela IBC 3494.42 0 -9.44 Currencies daily % YTD % change change Latest Brazil real 2.8675 -1.14 -7.32 Mexico peso 15.1216 -1.12 -2.50 Chile peso 629.5 -0.68 -3.67 Colombia peso 2419.04 -1.56 -1.28 Peru sol 3.096 -0.39 -3.78 Argentina peso 8.6675 0.06 -1.36 (interbank) Argentina peso 13.1 0.61 6.87 (parallel) (Reporting by Asher Levine and Bruno Federowski; Editing by Paul Simao)
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