EMERGING MARKETS-Latam currencies down before Fed; Venezuelan assets jump after election
SAO PAULO, Dec 7 (Reuters) - Latin American currencies were mostly weaker on Monday as investors braced for an expected U.S. interest rate hike next week, which could drain funds from emerging markets. The Mexican peso weakened 1 percent, although some investors found solace in the U.S. Federal Reserve's repeated assurances that it plans to proceed slowly with increases in borrowing costs. The Colombian peso underperformed its peers, pressured by a drop in oil prices to their lowest in almost seven years. The move came after the world's biggest producers failed to agree on curbing output despite a global supply glut. Venezuelan assets were a bright spot after the country's opposition thrashed the ruling party in parliamentary elections on Sunday. Hopes of market-friendly reforms in the crisis-plagued economy fostered demand for dollar-denominated sovereign bonds, as well as debt issued by state oil firm Petroleos de Venezuela (PDVSA). However, some analysts warned that the optimism could be overblown. "We suspect that the more immediate outcome ... would be a messy power struggle between the Assembly and the president," wrote Capital Economics emerging market economist Edward Glossop in a client note. The Brazilian real was nearly unchanged as investors digested the financial implications of a possible impeachment against President Dilma Rousseff. Latin American stock indexes and currencies at 1430 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 809,73 -0,31 -15,06 MSCI LatAm 1956,23 0,21 -28,43 Brazil Bovespa 45836,91 1,05 -8,34 Mexico IPC 43059,12 0,15 -0,20 Chile IPSA 3623,83 0,3 -5,90 Chile IGPA 17891,64 0,27 -5,19 Argentina MerVal 13070,63 1,16 52,36 Colombia IGBC 8023,61 -0,34 -31,04 Venezuela IBC 13117,29 1,84 239,94 Currencies daily % YTD % change change Latest Brazil real 3,7371 -0,03 -28,89 Mexico peso 16,8311 -1,03 -12,40 Chile peso 706,8 -0,64 -14,20 Colombia peso 3265 -1,90 -26,86 Peru sol 3,3711 -0,09 -11,63 Argentina peso (interbank) 9,7275 -0,08 -12,10 Argentina peso (parallel) 14,76 -0,20 -5,15 (Reporting by Bruno Federowski; Editing by Bill Trott)
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