EMERGING MARKETS-Latam currencies weaken ahead of Fed; Mexico eyes inflation report
RIO DE JANEIRO, Feb 18 (Reuters) - Latin American currencies weakened broadly on Wednesday as traders awaited the release of the U.S. Federal Reserve's latest policy-setting minutes. The Fed is set to release minutes from its January meeting at 2 p.m. ET (1900 GMT). Analysts said the minutes will likely support the view that the central bank will raise rates by mid-year, leading to a stronger dollar. Brazil's real weakened after reopening from a two and 1/2 day market holiday. The central bank did not intervene in the currency as the foreign exchange market had a shortened session, with trading resuming only in the afternoon. Traders said volume was very thin, adding to risks of higher volatility in the session. "The market is totally empty. All there is to do is adjust to what happened in recent days while the market was closed," said Reginaldo Siaca, head of currency trading at brokerage TOV in Sao Paulo. Mexico's peso also weakened slightly ahead of the central bank's release of its quarterly inflation report, expected later on Wednesday. The peso has lost almost 15 percent against the dollar in the last six months. "If the peso continues to weaken at this pace, it is possible that (the central bank) will hike before or around the same time the Fed does (June, in our view)," wrote Brown Brothers Harriman analysts led by Marc Chandler. "However, much depends on the underlying macro picture too, both domestically and globally." Most Latin American equities markets were flat, though Brazil's Bovespa index rose nearly 2 percent. Gains in the Bovespa were led by banks and state-run oil producer Petroleo Brasileiro SA, known as Petrobras. Key Latin American stock indexes and currencies at 1733 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 982.92 -0.02 2.8 MSCI LatAm 2652.36 0.56 -3.3 Brazil Bovespa 51514.53 1.74 3.01 Mexico IPC 43234.14 -0.04 0.21 Chile IPSA 3985.32 0.04 3.49 Chile IGPA 19395.09 0.06 2.78 Argentina MerVal 9567.27 0.05 11.52 Colombia IGBC 10723.51 0.14 -7.83 Peru IGRA 13792.59 0.18 -6.77 Venezuela IBC 3503.85 0.42 -9.20 Currencies daily % YTD % change change Latest Brazil real 2.8425 -0.45 -6.51 Mexico peso 14.9455 -0.20 -1.35 Chile peso 621.75 -0.24 -2.47 Colombia peso 2433.9 -0.78 -1.89 Peru sol 3.085 -0.06 -3.44 Argentina peso 8.6900 -0.06 -1.61 (interbank) Argentina peso 13 1.46 7.69 (parallel) (Reporting by Asher Levine and Bruno Federowski; Editing by Chizu Nomiyama)
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