EMERGING MARKETS-Latam currencies, Hungary's forint weaken
(Updates prices, adds analyst quotes, Latam currencies, Poland zloty; SAO PAULO dateline)
By Asher Levine and Sujata Rao
SAO PAULO/LONDON Feb 10 (Reuters) - Brazil's real weakened on Monday as traders corrected an overdone rally, while Hungary's forint dropped on concerns the central bank may cut interest rates further.
The real ended a four-day advance against the dollar, losing 0.66 percent and nearly erasing the previous two sessions' gains. The Chilean and Mexican pesos also weakened modestly.
The trading environment for emerging assets was generally positive, however, after soft U.S. jobs data on Friday reduced expectations that the Federal Reserve might speed up the rate of tapering of its monetary stimulus.
"The market read the U.S. payroll numbers on Friday as weak and expected the Fed to be more cautious with any tapering," said Gustavo Mendonca, an economist with Saga Capital in Rio de Janeiro. "We've had a bit of euphoria and today's move is a normal correction."
MSCI's emerging equity index edged down 0.1 percent as Brazil's Bovespa nearly erased the previous session's gains.
Investors are expected to remain cautious before this week's testimony in Congress by Janet Yellen, the new head of the Federal Reserve. She is known for her support of ultra-loose U.S. monetary policy, traders said.
The Hungarian forint dropped 1.27 percent against the dollar, reflecting nervousness before the central bank's meeting next week and the publication of data late this week which could show a fall in inflation to record lows and possibly into negative territory. Continuación...