EMERGING MARKETS-Latam currencies drop on Greece worries, U.S. data
SAO PAULO, June 24 (Reuters) - Latin American currencies weakened on Wednesday, driven by U.S. economic data and lingering concerns over a Greek debt default. Nearly every currency in the region fell against the dollar, though stocks moved slightly higher, with the MSCI Latin American stock index clawing back part of the previous session's losses. International creditors failed to strike a deal with Greece on Wednesday, adding to investor uncertainty over a potential debt default. Meanwhile, U.S. gross domestic product data for the first quarter showed contraction in the world's largest economy was less than previously estimated, increasing the odds that U.S. interest rates may soon go up. Jitters over the economic impact of a Greek default and the outlook for a coming increase in U.S. interest rates tend to drive investors towards the U.S. dollar and away from riskier assets such as Latin American currencies. The Colombian peso and Mexican peso both weakened for a second straight day, though Chile's currency gained slightly on higher prices for copper, the country's main export. Brazil's real gave up the previous session's gains despite prospects for even higher domestic interest rates following a quarterly inflation report released by the central bank before market open. The bank barely cut its inflation forecast for next year despite signs of a prolonged economic slump. "The 2015 inflation battle is long lost. What really matters now is 2016," wrote BNP Paribas economist Marcelo Carvalho, calling next year's inflation projection "an improvement, to be sure, but an unsatisfactory one." In equities markets, Brazil's Bovespa stock index advanced slightly, led by shares of state-run oil producer Petroleo Brasileiro SA, known as Petrobras. The shares gained about 2 percent following a media report on Wednesday that the company would cut its five-year investment plan by up to 30 percent, though the company responded in a securities filing that no decision had been made yet. Shares of miner Vale SA rose about 0.5 percent on higher iron-ore prices .IO62-CNI=SI. Mexico's IPC stock index was little changed. Key Latin American stock indexes and currencies at 1538 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 992.84 0.22 3.59 MSCI LatAm 2567.71 0.34 -6.18 Brazil Bovespa 54014.84 0.45 8.01 Mexico IPC 45416.15 -0.08 5.26 Chile IPSA 3909.06 -0.34 1.51 Chile IGPA 19042.76 -0.31 0.91 Argentina MerVal 11604.26 0.66 35.26 Colombia IGBC 10336.13 -0.17 -11.16 Venezuela IBC 0 0 -100.00 Currencies daily % YTD % change change Latest Brazil real 3.0906 -0.45 -14.01 Mexico peso 15.4447 -0.28 -4.54 Chile peso 632.2 0.09 -4.08 Colombia peso 2567.5 -0.66 -6.99 Peru sol 3.175 0.13 -6.17 Argentina peso (interbank) 9.0675 -0.03 -5.71 Argentina peso (parallel) 13.38 -0.22 4.63 (Reporting by Asher Levine; Editing by Andrew Hay)
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