EMERGING MARKETS-Latam currencies strengthen as oil recovers ahead of Fed
SAO PAULO, Dec 15 (Reuters) - Latin American currencies strengthened on Tuesday after a rise in oil prices rekindled demand for risky assets as the U.S. Federal Reserve began a widely anticipated two-day policy meeting. Traders believe the U.S. central bank will raise benchmark rates for the first time in almost a decade, while signaling that it will proceed slowly with additional increases. Though higher U.S. rates could pull investments away from emerging markets, traders said market reaction will hinge on the Fed's hints about what it will do next. The Colombian peso advanced 0.3 percent as oil prices recovered from near 11-year lows. The Mexican peso rose about 0.9 percent. The Brazilian real strengthened 0.7 percent as traders considered the implications of the latest developments in a sweeping corruption probe. Brazilian police searched the homes of Lower House Speaker Eduardo Cunha and other politicians on Tuesday as part of an investigation of a bribery scandal stemming from state-run oil company Petroleo Brasileiro SA. Cunha has played a pivotal role in efforts to impeach left-leaning President Dilma Rousseff, which has been cheered by traders. However, his rift with Rousseff has also hampered the approval of austerity measures in Congress that credit-rating agencies have called key for Brazil's investment-grade rating. Latin American stock indexes and currencies at 1400 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 779.7 1.1 -19.35 MSCI LatAm 1867.69 1.57 -32.58 Brazil Bovespa 45293.36 1.22 -9.43 Chile IPSA 3560.65 0.79 -7.54 Chile IGPA 17613.06 0.69 -6.66 Currencies daily % YTD % change change Latest Brazil real 3.8560 0.73 -31.08 Mexico peso 17.165 0.89 -14.10 Chile peso 708.9 0.40 -14.46 Colombia peso 3340.64 0.28 -28.52 Peru sol 3.373 0.03 -11.68 Argentina peso (interbank) 9.8025 -0.18 -12.78 Argentina peso (parallel) 14.64 1.50 -4.37 (Reporting by Bruno Federowski; Editing by Nick Zieminski)
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