EMERGING MARKETS-Mexico peso strengthens to highest level since mid-May
(New throughout, updates prices and market activity, adds peso gains) By Bruno Federowski and Gabriel Stargardter SAO PAULO/MEXICO CITY, Aug 15 (Reuters) - The Mexican peso strengthened on Monday to its highest level since mid-May, boosted by a rise in oil prices and bets that developed economies would continue with loose monetary policies. The peso strengthened 1.03 percent, boosted by a rally in crude prices on speculation of a coordinated action to limit global output. So far this month, the beleaguered currency has gained 3.6 percent, with investors betting that central banks will maintain loose monetary policy in the face of global volatility. Yet the peso remains down nearly 5 percent so far this year, pummeled by weak oil prices. The Mexican IPC stock index, meanwhile, posted its ninth consecutive session of gains, rising 0.68 percent, also boosted by the oil price rise. The Brazilian real weakened slightly on Monday, ending the day down 0.11 percent. Earlier in the session, the real had gained after a senior official told Reuters there was not much the government could do to halt the currency's recent rally. The real had posted its biggest daily loss in two months on Friday after interim President Michel Temer said his government would "look for an equilibrium" in the exchange rate. But a senior member of the economic team told Reuters that the real should continue to strengthen, given high liquidity abroad and less political uncertainty at home. "Friday's reading, that the central bank could try to fight off strength in the real, is rapidly fading," said José Carlos Amado, a trader with Spinelli brokerage in São Paulo. The real has set one-year highs on optimism over Temer's pledges of fiscal restraint, while expectations of low U.S. interest rates sparked a worldwide rally in emerging market assets. Markets in Colombia, Argentina and Chile were closed due to local holidays. Brazilian equities also rose, supported by higher oil prices. Shares of state-controlled Brazilian oil company Petróleo Brasileiro SA provided a major boost to Brazil's benchmark Bovespa stock index, which rose to its highest level since September 2014. Stocks in Braskem SA also contributed after Brazil's largest petrochemical company named Everson Bassinello as its new head of compliance. Braskem has sought to improve governance amid corruption charges as part of a sweeping graft probe involving government officials and executives at major companies. Key Latin American stock indexes and currencies at 2117 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 915.84 0.63 14.6 MSCI LatAm 2519.37 0.66 36.78 Brazil Bovespa 59145.976 1.45 36.63 Mexico IPC 48694.90 0.68 13.29 Venezuela IBC 12435.81 0.29 -14.75 Currencies daily % YTD % change change Latest Brazil real 3.1870 -0.11 24.23 Mexico peso 18.079 1.03 -4.93 (Reporting by Bruno Federowski and Gabriel Stargardter; Additional reporting by Paula Arend Laier; Editing by Lisa Von Ahn and David Gregorio)
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