EMERGING MARKETS-Latam currencies jump on bargain hunting after Brexit selloff
By Bruno Federowski SAO PAULO, June 28 (Reuters) - Latin American currencies jumped on Tuesday as investors scooped up bargains following a selloff triggered by Britain's decision to leave the European Union. The Mexican peso strengthened 1.4 percent after weakening 5 percent over the two previous trading days. Nevertheless, the currency remained near its historical lows, with many analysts forecasting the central bank could increase interest rates at this week's policy meeting to fight off price pressures. Yields paid on Mexican interest rate futures fell on Tuesday but still indicated traders saw a better-than-even chance of a hike on Thursday. "I don't think there is a need to hike but Banxico has put itself in a corner by focusing on the Mexican peso too much," 4Cast economist Pedro Tuesta said. "The market has basically priced in a hike and therefore could be disappointed by the lack of a hike". The Brazilian real soared 2 percent to its strongest in almost a year, outperforming its regional peers as traders all but priced out the chance of an interest rate cut in August. Brazil's central bank reiterated on Tuesday it has no plans yet to reduce rates, saying it aims to keep inflation inside the government's target band this year despite market expectations it could fail to do so. Traders also perceived hawkish overtones in comments by central bank governor Ilan Goldfajn later in the day. "Those who believed Goldfajn could have a dovish inclination will have to reassess this conviction," Absolute Investimentos partner Renato Botto said. Brazil's benchmark Bovespa index rose but gains were limited by a slump in shares of Hypermarcas SA. Local newspaper Estado de S.Paulo reported on Tuesday a former executive at the consumer goods maker paid 30 million reais ($9.03 million) in bribes to the ruling PMDB party. Shares of Estácio Participações SA rose 0.7 percent after Reuters reported at least 52 percent of shareholders in the for-profit college operator have voiced support for rival Kroton Educacional SA's bid. Key Latin American stock indexes and currencies at 15:00 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 805.44 1.37 0.05 MSCI LatAm 2142.22 2.85 13.83 Brazil Bovespa 49930.94 1.39 15.18 Mexico IPC 44756.10 1.07 4.14 Chile IPSA 3949.78 -0.39 7.32 Chile IGPA 19521.83 -0.34 7.55 Argentina MerVal 14100.27 2.36 20.77 Colombia IGBC 9752.71 0.78 14.10 Venezuela IBC 12882.24 -2.65 -11.69 Currencies daily % YTD % change change Latest Brazil real 3.3225 2.12 18.80 Mexico peso 18.9505 1.21 -9.08 Chile peso 674.2 0.74 5.27 Colombia peso 3010.1 1.58 5.29 Peru sol 3.3019 0.64 3.40 Argentina peso (interbank) 14.9000 2.68 -12.87 Argentina peso (parallel) 15.05 1.79 -5.18 (Reporting by Bruno Federowski; Additional reporting by Priscila Jordão; Editing by Andrea Ricci)
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