EMERGING MARKETS-Latam currencies up on China; Brazil real weakens after minister switch
By Bruno Federowski SAO PAULO, Dec 21 (Reuters) - Most Latin American currencies inched up on Monday on hopes of economic reform in China, but the Brazilian real weakened after the appointment of a leftist economist as finance minister raised concerns of fiscal laxness. A rise in Chinese stocks and pledges of additional policy support rekindled the appetite for high-yielding assets and boosted commodity prices. The Chilean peso advanced 0.4 percent, tracking a rally in copper prices to a one-week high, while the Mexican peso rose 0.6 percent. The Colombian peso retreated 0.2 percent as oil prices fell to their lowest in more than 11 years on fears of oversupply. The move came despite an increase in Colombian benchmark rates on Friday, which some investors believed should have come sooner. The Brazilian real underperformed, weakening 0.6 percent after President Dilma Rousseff named Nelson Barbosa to replace fiscally conservative Finance Minister Joaquim Levy. Traders saw the appointment as a step back from the fiscal rigor pursued for most of this year. "In our view, the change at the helm of the Finance Ministry reinforces the perception that, in an environment marked by a sharp GDP contraction and the beginning of the proceedings to impeach President Rousseff, the government is now somewhat more reluctant to further cut expenditures and raise taxes," BBVA analysts wrote in a client note. Moody's Investors Service said on Friday that the change could complicate Brazil's austerity efforts. Moody's had warned earlier this month it could soon become the third ratings agency to downgrade the country's debt to junk. Latin American stock indexes and currencies at 1405 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 792.95 0.41 -17.42 MSCI LatAm 1848.53 -0.64 -31.79 Brazil Bovespa 44108.73 0.45 -11.80 Chile IPSA 3641.22 0.41 -5.45 Chile IGPA 17959.4 0.35 -4.83 Colombia IGBC 8498.79 0 -26.95 Venezuela IBC 14403.59 0 273.27 Currencies daily % YTD % change change Latest Brazil real 3.9676 -0.55 -33.02 Mexico peso 17.042 0.60 -13.48 Chile peso 696.1 0.37 -12.89 Colombia peso 3333 -0.15 -28.35 Peru sol 3.3781 -0.03 -11.81 Argentina peso (interbank) 12.6000 5.16 -32.14 Argentina peso (parallel) 14.15 1.48 -1.06 (Editing by Lisa Von Ahn)
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