EMERGING MARKETS-Latam currencies fall on China, oil; Mexican peso hits record low
SAO PAULO, Dec 11 (Reuters) - Latin American currencies weakened on Friday after slides in the Chinese yuan and oil prices sent investors scurrying for the safety of the dollar, dragging the Mexican peso to a new record low. The yuan fell to its lowest level in more than four years, raising expectations that Beijing could allow an even larger depreciation as the economy shows growing signs of weakness. The move was followed by a slump in the Mexican peso to its all-time low, at 17.44 pesos per dollar. Also pressuring the currency was a drop in crude prices to their lowest in seven years, amid concerns about global oversupply. Investors also braced for an expected U.S. interest rate increase next week, which could pull investments away from high-yielding emerging market assets. Some traders were comforted, however, by signs that the bank will tighten monetary policy slowly from then on. The Brazilian real fell 1.5 percent, hit by media reports saying Finance Minister Joaquim Levy threatened to leave his post if Congress lowered the country's fiscal target for 2016. Levy has spearheaded efforts to cut spending and raise taxes in order to regain investor trust and fight a worsening recession. Traders worried that his exit could herald a return to the interventionist policies adopted during President Dilma Rousseff's first term in office. Latin American stock indexes and currencies at 1425 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 774.77 -1.81 -17.49 MSCI LatAm 1882.14 -1.69 -29.81 Brazil Bovespa 45749.55 0.26 -8.51 Chile IPSA 3558.15 -0.17 -7.60 Chile IGPA 17599.01 -0.15 -6.74 Currencies daily % YTD % change change Latest Brazil real 3.8590 -1.59 -31.14 Mexico peso 17.3505 -0.86 -15.02 Chile peso 707.3 -0.50 -14.27 Colombia peso 3283.95 -1.18 -27.28 Peru sol 3.3761 -0.09 -11.76 Argentina peso (interbank) 9.7625 -0.13 -12.42 Argentina peso (parallel) 14.72 0.07 -4.89 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli)
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