EMERGING MARKETS-Latam currencies weaken ahead of Fed policy decision
SAO PAULO, July 27 (Reuters) - Latin American currencies weakened on Wednesday as traders adopted a cautious stance ahead of a U.S. Federal Reserve policy decision later in the day. Investors widely expected the U.S. central bank to leave rates untouched, but growing expectations that it could increase them this year have reduced demand for emerging market assets. "A surprise in the tone of the policy statement could boost the value of the dollar," analysts with Guide Investimentos brokerage wrote in a client note. Markets were mostly unfazed by news that Japan will announce a $265 billion stimulus package next week, ramping up pressure for the central bank to announce complementary monetary easing following a meeting later this week. Both the Mexican and Colombian pesos weakened about 0.5 percent, weighed down by a drop in prices of crude. Brazil's benchmark Bovespa stock index rose for a fourth straight day as traders digested a fresh round of corporate reports. Units of Santander Brasil SA inched up 0.4 percent after the bank posted stronger-than-expected second-quarter profit amid tentative signs of recovery in Latin America's biggest economy. In a conference call, executives said the lender could gradually disburse more loans and possibly seek an acquisition. Shares of Telefónica Brasil SA advanced 1.5 percent, their biggest daily increase in two weeks. Credit Suisse analysts raised their price target for the stock after the phone carrier raised its outlook for cost savings. Telefónica Brasil reported on Tuesday lower profit second quarter profit but higher Ebitda, citing higher-than-expected synergies from its acquisition of broadband carrier GVT. Key Latin American stock indexes and currencies at 1550 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 873.89 0.36 9.64 MSCI LatAm 2363.10 0.15 28.95 Brazil Bovespa 56964.67 0.32 31.41 Mexico IPC 47200.74 0.58 9.83 Chile IPSA 4158.41 0.24 12.99 Chile IGPA 20528.75 0.25 13.10 Argentina MerVal 15573.99 -1.16 33.39 Colombia IGBC 9756.93 0.39 14.15 Venezuela IBC 12096.30 -1.09 -17.08 Currencies daily % YTD % change change Latest Brazil real 3.2889 -0.58 20.01 Mexico peso 18.8830 -0.52 -8.75 Chile peso 664.8 -0.57 6.75 Colombia peso 3074.3 -0.41 3.09 Peru sol 3.359 -0.06 1.64 Argentina peso (interbank) 14.9600 -0.03 -13.22 Argentina peso (parallel) 15.51 0.13 -7.99 (Reporting by Bruno Federowski and Paula Arend Laier; Writing by Bruno Federowski; Editing by Jonathan Oatis)
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