EMERGING MARKETS-Latam currencies, equities slip as traders await Yellen
(Updates prices with Brazil close; adds South Africa, Venezuela, Argentina markets)
By Asher Levine and Sujata Rao
SAO PAULO/LONDON Feb 10 (Reuters) - Latin American stocks and currencies weakened on Monday as traders corrected an overdone rally, though volumes were light ahead of Janet Yellen's first congressional testimony as the Federal Reserve's new chair.
Brazil's real ended a four-day advance against the dollar, losing 1.13 percent and erasing the previous two sessions' gains. The Chilean and Mexican pesos also weakened modestly.
Investors remained cautious before Yellen's testimony on Tuesday, when they will look for clues on the future of the Fed's monetary stimulus program, traders said.
MSCI's emerging equity index lost 0.25 percent while its Latin America index dropped the most in a week.
Tepid U.S. jobs data on Friday helped support emerging markets, however, by reducing expectations that the Fed might speed up the tapering of its stimulus program.
"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."
Elsewhere in Latin America, Argentina's peso extended its rally as local lenders continued to sell dollars following a central bank rule change last week. The rule limits the net foreign currency position of the nation's banks. Continuación...