EMERGING MARKETS-Latam currencies steady; Brazil assets fall on Moody's concern
By Bruno Federowski SAO PAULO, Dec 10 (Reuters) - Latin American currencies were mostly steady on Thursday ahead of a U.S. Federal Reserve policy meeting next week, while Brazilian stocks slipped on concern Moody's Investors Service will cut the country's debt ratings to junk. The Fed is widely expected to increase benchmark rates for the first time in almost a decade on Dec. 16, which could drive investments away from emerging markets. However, the bank is expected to hike rates slowly thereafter, a Reuters poll of economists showed. Both the Chilean peso and the Mexican peso were little changed as oil prices fluctuated around the lowest in six years. A recent drop in oil drove down demand for commodity-linked currencies. The Brazilian real and the benchmark Bovespa stock index fell about 1 percent after Moody's warned it may downgrade the country's Baa3 rating. Risks of political turmoil have escalated after the lower house opened impeachment proceedings against President Dilma Rousseff, Moody's said. Market reaction was muted, however, as many traders had prepared for another downgrade into junk following Standard & Poor's September decision. "The event of losing two investment grade ratings is widely anticipated as political crisis and stagflation continues with no improvement on restoring the fiscal anchor," said Siobhan Morden, head of Latin America fixed-income strategy at Nomura Securities in New York. Moody's also cut the rating of Petroleo Brasileiro SA, or Petrobras, deeper into junk, citing weak oil prices and a stalled asset sale program. Shares fell 3.5 percent. Latin American stock indexes and currencies at 1400 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 789.42 -0.73 -16.84 MSCI LatAm 1913.02 -1.17 -29.04 Brazil Bovespa 45650.88 -0.99 -8.71 Chile IPSA 3571.42 0.34 -7.26 Chile IGPA 17654.35 0.3 -6.44 Colombia IGBC 7935.35 0 -31.80 Venezuela IBC 14619.21 -0.24 278.86 Currencies daily % YTD % change change Latest Brazil real 3.7751 -1.02 -29.60 Mexico peso 17.0822 -0.10 -13.69 Chile peso 703.6 -0.05 -13.81 Colombia peso 3262.6 0.59 -26.81 Peru sol 3.3721 0.03 -11.66 Argentina peso (interbank) 9.7425 -0.05 -12.24 Argentina peso (parallel) 14.68 0.89 -4.63 (Editing by Bernadette Baum)
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