EMERGING MARKETS-Latam currencies drop on Greece risk, U.S. data
SAO PAULO, May 26 (Reuters) - Latin American currencies weakened across the board on Tuesday as the U.S. dollar strengthened on the back of heightened investor concern over Greece's debt crisis and the outlook for higher U.S. interest rates. Equities were mostly lower, with the MSCI Latin American stock index on track for its worst intraday loss in over a week. Greece's government on Monday said it intends to make good on its debt obligations but needs aid urgently to be able to do so. Worries over the possibility of a Greek debt default and its effect on euro zone economic growth tend to drive investors towards the safe-have U.S. dollar and away from riskier emerging market currencies. The dollar saw another boost from data on Tuesday showing U.S. business investment spending plans increased solidly for a second straight month in April. Encouraging U.S. economic data tends to raise investor expectations that interest rates in the world's largest economy will rise sooner rather than later, which make higher-yielding but riskier Latin American securities less attractive. The Brazilian real weakened for the fourth straight session to trade around the 3.12 per dollar level. The real has seen pressure in recent days on concerns over disagreements among policymakers on the extent of a fiscal austerity program aimed at warding off a sovereign credit rating downgrade. Data on Tuesday also showed Brazil's current account deficit widened to $6.901 billion in April from $5.736 billion in March. Elsewhere, Colombia's peso traded about 2 percent weaker, weighed down by lower prices for oil, the country's leading export. The Mexican and Chilean pesos saw more muted moves, trading only slightly lower. In equities markets, Brazil's Bovespa stock index erased the previous session's gains and turned lower, driven down mostly by shares of banks. Brazilian lenders saw their stocks decline sharply last week as investors digested the impact of newly-announced income tax changes for the sector. Mexico's IPC stock index edged slightly lower for the sixth straight session, while Chile's IPSA stock index was little changed. Key Latin American stock indexes and currencies at 1357 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1028.68 -0.64 8.26 MSCI LatAm 2572.73 -1.68 -4.07 Brazil Bovespa 54272.22 -0.62 8.53 Mexico IPC 44600.12 -0.56 3.37 Chile IPSA 4043.9 0 5.01 Chile IGPA 19646.32 -0.04 4.11 Argentina MerVal 0 0 -100.00 Colombia IGBC 10537.38 0.36 -9.43 Peru IGRA - - - Venezuela IBC 9440.83 0 144.66 Currencies daily % YTD % change change Latest Brazil real 3.1249 -0.93 -14.96 Mexico peso 15.2856 -0.20 -3.54 Chile peso 611.9 -0.15 -0.90 Colombia peso 2534.5 -2.01 -5.78 Peru sol 3.151 0.00 -5.46 Argentina peso 8.9700 0.03 -4.68 (interbank) Argentina peso 12.6 0.32 11.11 (parallel) (Reporting by Asher Levine Editing by W Simon)
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