EMERGING MARKETS-Brazil's real sinks on debt data; Mexico peso up on intervention

viernes 31 de julio de 2015 11:27 GYT
 

By Asher Levine
    SAO PAULO, July 31 (Reuters) - Brazil's currency sank its
most in nearly three months on Friday after worse-than-expected
government debt data raised investor fears of a credit
downgrade, while Mexico's currency gained following new
government efforts to support the struggling peso.
    Other currencies in the region were little changed, though
Colombia's peso posted a modest rebound after hitting its
weakest in nearly 12 years on Thursday.
    The Brazilian real  started the trading session
slightly higher against the dollar but moved into negative
territory after the central bank reported a much
wider-than-expected primary budget deficit for June.
    Brazil's public accounts continue to suffer under a
weakening economy, contributing to investor expectations that
the country could lose its investment-grade credit rating.
    The real sank to 3.41 per dollar in early-afternoon trading,
a closing level since March, 2003.
    Traders said part of the day's volatility was also due to
end-of-the-month positioning, when the so-called Ptax rate, used
in some financial contracts, is set.
    Meanwhile, Mexico's peso moved in the opposite
direction, posting its biggest one-day gain in over four months.
    Mexico substantially bolstered its intervention program on
Thursday in an effort to defend the peso as the central bank
warned the currency could slump further after a recent string of
record lows. 
    On Friday Mexico's Central Bank chief, Agustin Carstens,
said policymakers could raise interest rates at any time to
defend the peso, independently of what the U.S. Federal Reserve
does. 
    "Even if the peso continues to depreciate against the
dollar, it would do so at slower pace than other emerging market
currencies," wrote Nomura's Benito Berber in a client note.
    The peso is down about 21 percent over the past 12 months
while the real has dropped about 50 percent. As they fall, other
emerging market assets have also declined, driven partly by the
outlook for higher interest rates in the United States and
slowing demand from major commodities buyer China.
    Meanwhile, equities markets moved higher, with the MSCI
Latin American stock index nearly winning back
the previous session's losses.
    Brazil's Bovespa stock index gained about 1 percent,
driven by shares of banks and financial companies.

    Key Latin American stock indexes and currencies at 1502 GMT:

 Stock indexes                        daily %    YTD %
                             Latest    change   change
 MSCI Emerging Markets        901.85     0.87    -6.51
                                               
 MSCI LatAm                  2284.52     1.05   -17.12
                                               
 Brazil Bovespa           50362.2439     0.93     0.71
                                   8           
 Mexico IPC                 44351.85    -0.05     2.80
                                               
 Chile IPSA                  3842.26     1.43    -0.23
                                               
 Chile IGPA                 18711.89     1.23    -0.84
                                               
 Argentina MerVal            11182.8    -0.37    30.35
                                               
 Colombia IGBC              10064.22    -0.15   -13.50
                                               
 Venezuela IBC               15471.8        0   300.95
                                               
                                                      
 Currencies                           daily %    YTD %
                                       change   change
                              Latest           
 Brazil real                  3.4114    -1.21   -22.10
                                               
 Mexico peso                  16.005     1.66    -7.88
                                               
 Chile peso                    671.5     0.30    -9.69
                                               
 Colombia peso                2856.4     0.68   -16.40
 Peru sol                     3.1911     0.06    -6.65
                                               
 Argentina peso               9.1850     0.00    -6.91
 (interbank)                                   
                                               
 Argentina peso                14.88     0.20    -5.91
 (parallel)                                    
                                               
 
 (Editing by Jeffrey Benkoe)