EMERGING MARKETS-Latam currencies strengthen as oil recovers ahead of Fed
(Adds historic comparison for Mexican peso; updates prices throughout) 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 expect the U.S. central bank will raise benchmark interest rates for the first time in almost a decade, while signaling that it will proceed slowly with further 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 more than 1 percent as oil prices recovered from near 11-year lows. The Mexican peso rose about 1.2 percent, its biggest one-day gain since October. The Brazilian real strengthened 0.25 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 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 at 2238 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 779.41 1.06 -18.5 MSCI LatAm 1,869.22 1.65 -31.47 Brazil Bovespa 44,872.47 0.28 -10.27 Mexico IPC 42,905.2 2.39 -0.56 Chile IPSA 3,570.23 1.06 -7.29 Chile IGPA 17,648.2 0.89 -6.48 Argentina MerVal 12,307.13 -0.24 43.46 Colombia IGBC 8,184.36 2.9 -29.66 Venezuela IBC 14,471.11 -0.05 275.02 (Reporting by Bruno Federowski; Additional reporting by Alexandra Alper; Editing by Nick Zieminski and Leslie Adler)
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