EMERGING MARKETS-Latam markets gain on commodities prices
By Asher Levine SAO PAULO, June 10 (Reuters) - Latin American currencies extended gains against the dollar into a third session on Wednesday as commodities prices advanced, while local stock markets followed suit. The Colombian and Chilean pesos led currency gains in the region as the MSCI Latin American stock index touched its highest level in two weeks. The Colombian peso has gained about 4 percent this week, helping roll back part of May's 6.3 percent loss. Traders attributed most of the currency's recent advance to higher prices for oil, Colombia's primary export. Oil prices rose for the second straight day on Wednesday on expectations U.S. government data will confirm a weekly drawdown in crude inventories and on signs that U.S. oil production growth was leveling off. Commodities prices also drove gains in Chile's peso led by higher prices for copper, Chile's top export. The Brazilian real strengthened slightly less than its regional peers as investors digested Wednesday data that showed inflation in Brazil rose to an 11-year high of 8.47 percent in the 12 months through May. Yields on Brazilian interest rate futures <0#DIJ:> rose across the curve on investor bets that the central bank will respond with additional interest rate hikes. The real is up nearly 3 percent over the last two weeks after investors pulled back from a recent dollar rally supported by the outlook for higher U.S. interest rates. "My fear is that there will be a very sharp reversal the next time we see positive (economic) data from the U.S.," said Pedro Tuesta, an economist with 4Cast in Washington, D.C. In equities markets, Brazil's Bovespa stock index erased the previous three sessions' losses, led by an over 4 percent gain in preferred shares of iron-ore producer Vale SA . Iron-ore prices rose on Wednesday as stocks of the steelmaking commodity at China's ports dropped for the eighth consecutive week, data showed. Vale's chief executive said on Wednesday that he expected Chinese production of higher grade iron ore to fall below 200 million tonnes this year. China is the top export destination for Vale's iron ore. Key Latin American stock indexes and currencies at 1646 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 977.47 0.66 1.55 MSCI LatAm 2554.33 1.76 -7.97 Brazil Bovespa 53813.22 1.89 7.61 Mexico IPC 44674.68 0.35 3.54 Chile IPSA 3951.8 1.16 2.62 Chile IGPA 19256.04 1.01 2.04 Argentina MerVal 11521.329 1.22 34.30 Colombia IGBC 10338.24 0.61 -11.14 Peru IGRA - - - Venezuela IBC 13746.36 2.65 256.24 Currencies daily % YTD % change change Latest Brazil real 3.0924 0.24 -14.06 Mexico peso 15.471 0.69 -4.70 Chile peso 624.8 0.12 -2.94 Colombia peso 2523 1.27 -5.35 Peru sol 3.1541 0.00 -5.55 Argentina peso 9.0225 0.03 -5.24 (interbank) Argentina peso 12.57 0.40 11.38 (parallel) (Additional reporting by Bruno Federowski; Editing by Andrew Hay)
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