EMERGING MARKETS-Brazil real firms as impeachment vote looms

miércoles 31 de agosto de 2016 10:57 GYT

By Bruno Federowski
    SAO PAULO, Aug 31 (Reuters) - The Brazilian real firmed on
Wednesday hours before the country's Senate was expected to vote
to remove President Dilma Rousseff from office and ratify Vice
President Michel Temer as her successor.
    The real rose as much as 0.6 percent to 3.2214 per
dollar but later pared gains to 3.2345 to the greenback. The
currency has jumped more than 20 percent this year on hopes that
Temer will manage to curb rising debt and regain the trust of
the business sector.
    Many investors blame the interventionist policies pursued by
Rousseff's Workers' Party during 13 years in government for
dragging Latin America's biggest economy into its deepest
recession in decades.
    Brazil's economy shrank for a sixth straight quarter between
April and June, but investments grew for the first time since
2013 and fueled hopes of a modest recovery. 
    Temer took over as interim president after Rousseff's
suspension from office in May on charges of doctoring budget
figures. The Senate trial is expected to culminate with a
verdict to convict her on Wednesday.
    Temer has so far run into difficulties gathering support for
painful austerity measures in Congress, but many expect him to
toughen up after he is confirmed as president.
    "From now on, (Brazilian asset) prices will only continue to
improve if there's a clear fiscal adjustment that starts as soon
as possible," said Arnaldo Curvello, head of asset management at
the brokerage Ativa. 
     Analysts with MB Associados consultancy believe Rousseff's
removal from office could trigger inflows that lift the real to
3.00 per dollar.
    On Wednesday, the real outperformed most Latin American
peers, which were nearly flat after the U.S. private sector
added more jobs than expected, bolstering expectations of a rate
hike as soon as next month. 
    Comments by U.S. Federal Reserve policymakers including
Chair Janet Yellen strengthened bets that U.S. interest rates
could rise sooner rather than later but also kept investors
guessing over the specific timing of an increase.
    Traders will look for additional clues over the Fed's policy
following the U.S. government's release on Friday of the closely
watched payrolls report.
    Higher interest rates in the United States could dull the
allure of higher-yielding, riskier investments in emerging
    Key Latin American stock indexes and currencies at 1450 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
 MSCI Emerging Markets               893.40    -0.61    13.19
 MSCI LatAm                         2402.86    -0.44    31.89
 Brazil Bovespa                    57973.32    -1.03    33.73
 Mexico IPC                        47479.75    -0.36    10.48
 Chile IPSA                         4126.89    -0.33    12.14
 Chile IGPA                        20473.61    -0.31    12.79
 Argentina MerVal                  15838.01    -0.21    35.66
 Colombia IGBC                     10173.45     0.46    19.02
 Venezuela IBC                     12013.27     0.13   -17.65
 Currencies                                  daily %    YTD %
                                              change   change
 Brazil real                         3.2345     0.15    22.03
 Mexico peso                        18.8570    -0.17    -8.63
 Chile peso                           678.2    -0.50     4.64
 Colombia peso                         2952    -0.34     7.36
 Peru sol                             3.389    -0.35     0.74
 Argentina peso (interbank)         14.8900     0.94   -12.81
 Argentina peso (parallel)            15.42     0.45    -7.46
 (Reporting by Bruno Federowski; Editing by W Simon)