EMERGING MARKETS-Latam currencies weaken ahead of Fed as oil slumps
SAO PAULO, Dec 14 (Reuters) - Latin American currencies mostly weakened on Monday as a drop in oil prices to financial crisis-era lows dampened appetite for risky assets ahead of a widely anticipated U.S. Federal Reserve meeting. The U.S. central bank is expected to raise benchmark rates for the first time in almost a decade on Wednesday, which could reduce the allure of assets in emerging markets. However, investors seemed to have prepared for the move well in advance and expected the bank to tighten policy slowly in the months that follow. "To a large extent, this move, and some modest additional tightening, is already priced into the markets," wrote Scotiabank analysts in a client note. "So much will hinge on what the Fed says in terms of market reaction." The Colombian peso dropped 0.9 percent as oil prices resumed their slump amid concerns of a global glut. Brazil's currency and stocks also slipped after demonstrations demanding President Dilma Rousseff's ouster on Sunday yielded a smaller attendance than earlier protests. The Brazilian real weakened 0.8 percent, while the country's Bovespa stock index fell 0.5 percent. Traders have largely applauded the opening of impeachment proceedings against left-leaning Rousseff, betting that a political reckoning could jumpstart a recovery in Latin America's largest economy. Some analysts warn, however, that the optimism could be short-lived. Moody's Investors Service said last week it could downgrade the country's rating to junk because political uncertainty may delay the approval of fiscal austerity measures. Latin American stock indexes and currencies at 1420 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 771.88 -0.22 -19.11 MSCI LatAm 1848.15 -0.45 -31.94 Brazil Bovespa 45060.31 -0.45 -9.89 Chile IPSA 3540.55 0.21 -8.06 Chile IGPA 17523.67 0.17 -7.14 Venezuela IBC 15051.72 0.31 290.07 Currencies daily % YTD % change change Latest Brazil real 3.9014 -0.75 -31.88 Mexico peso 17.3243 0.40 -14.89 Chile peso 711.1 -0.33 -14.72 Colombia peso 3350.51 -0.94 -28.73 Peru sol 3.3831 -0.12 -11.94 Argentina peso (interbank) 9.7800 -0.08 -12.58 Argentina peso (parallel) 14.81 -0.27 -5.47 (Reporting by Bruno Federowski; Editing by Lisa Von Ahn)
© Thomson Reuters 2016 All rights reserved.