EMERGING MARKETS-Latam currencies steady after Fed; Argentine peso plummets
(Adds Argentine peso, BTG Pactual shares) By Bruno Federowski SAO PAULO, Dec 17 (Reuters) - Latin American currencies were mostly steady on Thursday as traders took an increase in U.S. interest rates as a sign of confidence in the world's largest economy, while the Argentine peso plunged after the government lifted currency controls. Argentina's peso plummeted 28 percent, representing its biggest daily devaluation in decades, after the country's new government floated the currency. Newly inducted President Mauricio Macri has promised to implement free-market reforms in an attempt to heal the crisis-ridden economy. "Overall, it appears the government's main goal is to manage the one-off peso devaluation while minimizing the risk of FX overshooting," wrote JP Morgan analyst Iker Cabiedes in a client note. Trade was muted in other markets a day after the U.S. Federal Reserve raised benchmark rates for the first time in nearly a decade. Although higher U.S. rates could pull investment away from emerging markets, Latin American currencies mostly strengthened after the announcement. Traders took comfort in Fed Chair Janet Yellen's assurance that the bank will proceed slowly with hikes over the following months. Wall Street's top banks expect the Fed to next raise rates in the first quarter of next year, a Reuters poll showed. "For the market, this is the best of both worlds," said Reginaldo Galhardo, head of foreign exchange trading at Treviso brokerage in São Paulo. The Mexican peso weakened about 0.9 percent after posting its best 6-day stretch in about three weeks on Wednesday. The Brazilian real, which had already closed at the time of the Fed announcement, rose 0.4 percent while the country's Bovespa stock index advanced 1.8 percent. Shares of Grupo BTG Pactual SA jumped 11 percent after a Supreme Court Justice said that André Esteves, the bank's former chief executive, will be released from prison. Esteves has been in jail since Nov. 25 on charges of seeking to obstruct a corruption probe. Latin American stock indexes and currencies at 1620 GMT Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 797.37 0.89 -17.36 MSCI LatAm 1897.55 1.17 -31.24 Brazil Bovespa 45791.67 1.72 -8.43 Mexico IPC 43412.3 -0.04 0.62 Chile IPSA 3658.61 1.08 -4.99 Chile IGPA 18025.46 0.95 -4.48 Argentina MerVal 12126.279 0.74 41.35 Colombia IGBC 8467.09 0.65 -27.23 Venezuela IBC 14533.18 0.13 276.63 Currencies daily % YTD % change change Latest Brazil real 3.9075 0.39 -31.99 Mexico peso 17.1224 -0.87 -13.89 Chile peso 708.3 0.01 -14.39 Colombia peso 3329.5 0.08 -28.28 Peru sol 3.3751 -0.21 -11.74 Argentina peso (interbank) 13.7000 -28.27 -37.59 Argentina peso (parallel) 14.25 2.25 -1.75 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli and Bill Rigby)
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