EMERGING MARKETS-Latam markets rally on Yellen remarks, Greece
RIO DE JANEIRO, Feb 24 (Reuters) - Latin American financial markets rose on Tuesday after U.S. Federal Reserve Chair Janet Yellen brought relief to investors who feared she could hint at a June interest rate hike, and as Greece secured a four-month extension of its financial lifeline. The Brazilian real jumped 1.6 percent, followed by a 1.2 percent gain in the Mexican peso, after Yellen told U.S. lawmakers that the Fed is preparing to consider interest rate hikes "on a meeting-by-meeting basis." That could open the door to an interest rate increase as early as June, though investors interpreted Yellen's testimony overall as likely indicating a later date for a rate hike. Short-term rate futures indicated the market expects the first increase in September, the same as before Yellen's testimony. The later the Fed raises its benchmark interest rate, the more investors will be compelled to buy higher-yielding assets in emerging markets. Latin American stocks rose 1.3 percent according to a benchmark MSCI index, on track to close at their highest level since Jan. 28. Prospects for higher U.S. interest rates and fears that Greece may be forced to leave the euro zone have been among the main drags on emerging markets recently. But Greece also managed to secure four additional months of financial rescue after sending its creditors a detailed list of reforms it plans to implement by end of June. "The Greek situation seems to be taking the right direction," said Reginaldo Galhardo, head of currency trading at Treviso brokerage in Brazil. Also supporting the Brazilian real was a report that the Brazilian government is working on a plan to save up around 80 billion reais ($28 billion) to meet this year's fiscal goal and regain investors' trust. Many investors fear a sharp economic deterioration in Brazil may prevent the government from meeting its primary fiscal surplus goal of 1.2 percent of gross domestic product this year. Key Latin American currencies and stock indexes at 1930 GMT Stock indexes daily % YTD % change change Latest MSCI Emerging 989.02 0.56 2.84 Markets MSCI LatAm 2668.64 1.29 -3.41 Brazil Bovespa 51730.06 0.88 3.44 Mexico IPC 43730.6 0.13 1.36 Chile IPSA 4001.56 -0.56 3.91 Chile IGPA 19461.07 -0.5 3.13 Argentina MerVal 9649.199 1.46 12.47 Colombia IGBC 10458.34 -0.76 -10.11 Peru IGRA 13474.91 0.11 -8.92 Venezuela IBC 3480.46 -0.04 -9.80 Currencies daily % YTD % change change Latest Brazil real 2.8319 1.63 -6.16 Mexico peso 14.923 1.15 -1.20 Chile peso 620.25 0.36 -2.23 Colombia peso 2485 0.53 -3.90 Peru sol 3.092 -0.03 -3.65 Argentina peso 8.7150 -0.06 -1.89 (interbank) Argentina peso 13.1 0.38 6.87 (parallel) (Reporting by Walter Brandimarte in Rio de Janeiro and Bruno Federowski in Sao Paulo; Editing by Diane Craft)
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