EMERGING MARKETS-Latam currencies drop vs dollar; Brazil rate yields fall
SAO PAULO, July 20 (Reuters) - Latin American currencies weakened on Monday, tracking the dollar's rally in global markets, while yields on Brazil interest rate futures dipped on the outlook for inflation. Every major currency in the region eased against the dollar though Colombia's peso was little changed. Mexican and Chilean stocks moved slightly higher while Brazilian shares sank, driving the broader MSCI Latin American stock index to its second straight loss. The dollar touched its highest since April 23 against a basket of major currencies, supported by statements made by Federal Reserve Chair Janet Yellen last week reiterating that U.S. interest rates will probably rise later in the year. Mexico's peso weakened past the 16-per-dollar level for the first time despite recent central bank efforts to support the currency through market intervention. Meanwhile, Brazil's real weakened for a third straight day as investors continued to weigh mounting political uncertainty due to conflicts within President Dilma Rousseff's governing coalition. The infighting could potentially derail spending cuts critical to fending off a credit downgrade. Yields on Brazilian interest rate futures <0#DIJ:> fell across the yield curve after a local news agency, citing "a qualified source," said the government is satisfied with what it sees as a decline in inflation expectations. According to the results of a Reuters poll of analysts on Monday, Brazil's inflation rate likely slowed in the month to mid-July as the pace of economic growth has slowed, opening the door for a smaller interest rate hike later this month. Key Latin American stock indexes and currencies at 1720 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 934.47 -0.77 -1.53 MSCI LatAm 2,426.18 -0.92 -10.23 Brazil Bovespa 51,819.92 -1 3.62 Mexico IPC 45,593.09 0.59 5.67 Chile IPSA 3918.15 0.46 1.74 Chile IGPA 19,035.25 0.41 0.87 Argentina MerVal 12,183.85 -1.56 42.02 Colombia IGBC 9,989.33 -1.48 -14.14 Venezuela IBC 15,125.78 1.59 291.99 Currencies Latest Daily YTD pct pct change change Brazil real 3.2148 -0.70 -17.34 Mexico peso 15.997 -0.43 -7.83 Chile peso 649.25 -0.54 -6.60 Colombia peso 2,760 -0.04 -13.48 Peru sol 3.1851 -0.09 -6.47 Argentina peso 9.1500 -0.03 -6.56 (interbank) Argentina peso 14.37 -1.04 -2.57 (parallel) (Reporting by Asher Levine and Bruno Federowski, editing by G Crosse)
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