EMERGING MARKETS-Brazil real, Mexico peso firm on U.S. data, Yellen comments
By Bruno Federowski SAO PAULO, Oct 17 (Reuters) - The Brazilian and Mexican currencies strengthened on Monday as weak U.S. economic figures and comments by Federal Reserve Chair Janet Yellen boosted expectations that interest rates will stay low for longer. U.S. industrial production barely rose in September, suggesting a modest acceleration in economic growth in the third quarter. The figures came after Yellen said on Friday the Fed may need to run a "high-pressure economy" to reverse damage from the financial crisis. Her remarks raised speculation that Yellen may be willing to let inflation run above the bank's 2 percent target, keeping monetary policy loose for a long time. Keeping U.S. rates low would benefit riskier emerging market assets, which tend to lure foreign investors with the promise of higher returns. The Mexican peso was the biggest gainer in the region as traders bet that Republican U.S. presidential nominee Donald Trump, who has pledged to curtail trade and financial flows with Mexico, will lose the election. Sentiment was somewhat mixed in stock markets as traders feared U.S. economic weakness could hurt Latin American exports. Brazil's benchmark Bovespa stock index rose 0.4 percent, but gains were limited by falling shares of health insurance company Qualicorp SA. Brazil's central bank will announce its next interest rate decision on Wednesday after markets close. Bets on a rate cut of 50 basis points have grown since Friday, when state-controlled oil company Petróleo Brasileiro SA announced it was lowering domestic fuel prices. Key Latin American stock indexes and currencies at 1410 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 894.32 -0.3 12.96 MSCI LatAm 2506.11 0.4 36.41 Brazil Bovespa 62034.49 0.43 43.10 Mexico IPC 47730.86 0.06 11.06 Chile IPSA 4150.04 0.21 12.77 Chile IGPA 20787.70 0.2 14.52 Venezuela IBC 13442.24 -0.81 -7.86 Currencies daily % YTD % change change Latest Brazil real 3.1945 0.27 23.56 Mexico peso 18.8675 0.81 -8.68 Chile peso 670.3 -0.01 5.88 Peru sol 3.392 0.27 0.65 Argentina peso (interbank) 15.1800 -0.03 -14.48 Argentina peso (parallel) 15.55 0.00 -8.23 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli)
© Thomson Reuters 2017 All rights reserved.