EMERGING MARKETS-Emerging currencies weaken broadly on Greece, Ukraine

miércoles 11 de febrero de 2015 14:46 GYT
 

(Recasts to broaden scope; adds quotes, updates prices)
    By Asher Levine
    SAO PAULO, Feb 11 (Reuters) - Emerging market currencies
weakened against the dollar on Wednesday as fraught Greek debt
negotiations and an escalation of violence in Ukraine sapped
demand for higher-risk assets.
    Greek Finance Minister Yanis Varoufakis met euro zone
finance ministers on Wednesday, pushing plans to scrap austerity
measures and to restructure Greece's massive debt. But Germany
has ruled out further assistance, raising fears of a possible
debt default by Greece and its exit from the euro currency.
 
    "The logic of each side demands negotiating until the very
last minute," Brown Brothers Harriman's Marc Chandler wrote in a
client note. "Of course, the nature of the brinkmanship exercise
risks a miscalculation that sends both over the abyss."
    Meanwhile, worries that the conflict in Ukraine could
broaden also drove a flight to safe-haven assets, helping push
Turkey's lira to a record low and South Africa's rand
 to its weakest level in nearly 13 years.
    "As people turn to sell emerging markets, those countries
with balance of payments problems such as Turkey and South
Africa are getting hit the hardest," said Sebastien Barbe, head
of emerging market strategy at Credit Agricole in Paris.
    In Latin America, the Brazilian real dropped more
than 1 percent as disappointing monthly retail sales data helped
drag the currency further past 10-year lows.
    Other currencies in the region weakened as well, with the
Colombian peso and the Mexican peso hit by a
further decline in oil prices. 
    Brazil's real fell as low as 2.8777 per dollar on Wednesday
after data showed retail sales declined at the sharpest pace on
record in December. 
    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 so far in
February.
    Brazilian inflation expectations continue to climb while
growth forecasts increasingly point to another economic
recession in Latin America's largest economy this year.
    Investors fear that the slowdown could loosen the
government's commitment to making the fiscal adjustments the
country needs to ward off a credit rating downgrade.
    In Venezuela, government bond prices tumbled after Caracas
announced a new foreign exchange platform that was seen as
insufficient to resolve the country's economic crisis.
 
    Venezuela has struggled to find dollars to pay for imports
as its oil export revenues tumble with lower oil prices.
    "They are racing against time. They have a huge financing
gap and they are taking only small steps," said Siobhan Morden,
head of Latin America strategy at Jefferies in New York. "I
would say there is still a high probability of default this
year. They might survive to 2016."

 (Additional reporting by Sujata Rao in London and David Gaffen
in New York; editing by Paul Simao and G Crosse)