EMERGING MARKETS-Chilean peso jumps on inflation data; Bovespa falls
By Asher Levine SAO PAULO, May 8 (Reuters) - The Chilean peso posted its biggest gain against the dollar in over seven months on Thursday after higher-than-expected inflation data dampened expectations that interest rates would be cut at the central bank's next policy meeting. Most other currencies in Latin America strengthened against the dollar after U.S. Federal Reserve Chair Janet Yellen signaled the Fed would continue to support the economy with monetary stimulus. The region's stock indexes also gained, except Brazil's Bovespa, which was weighed down by a decline in Petrobras shares. Inflation in Chile rose far above market expectations in April, data showed Thursday. The central bank, which has cut rates 100 basis points since October in a bid to stimulate Chile's flagging economy, meets to decide the key interest rate next week. "This print will inevitably postpone the next move from the (central bank)," Citi analyst Dirk Willer wrote in a client note. "They believe that higher inflation is transitory ... but higher core and non-tradable prices should give them pause on cutting rates too soon." The Colombian peso also strengthened, reaching its highest level against the dollar in over six months, while gains in the Mexican peso were muted by better-than-expected inflation data on Thursday. The region's stocks, as measured by the MSCI Latin American stock index, were up about 0.5 percent. A four-session winning streak by Brazil's Bovespa stock index was in danger of ending. Shares of state-run oil firm Petrobras, formally known as Petroleo Brasileiro SA fell 3 percent, leading the Bovespa to a nearly 1 percent decline. Petrobras shares have gained more than 50 percent over the past 35 days, fueled by a decline in President Dilma Rousseff's approval rating ahead of October's election. Many minority shareholders have complained that her administration is mismanaging the company. "Today looks like profit-taking as we are also seeing other stocks that have gained a lot on the back of Rousseff's poll numbers falling today, like Banco do Brasil," said Ariovaldo Santos, a trader with H.Commcor in Sao Paulo. Key Latin American stock indexes and currencies at 1604 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1010.8 0.63 -4.34 MSCI LatAm 3373.67 0.51 4.87 Brazil Bovespa 53542.33 -0.94 3.95 Mexico IPC 41966.17 0.39 -1.78 Chile IPSA 3917.29 0.35 5.90 Chile IGPA 19216.29 0.29 5.43 Argentina MerVal 6924.03 0.03 28.44 Colombia IGBC 13685.79 1.06 4.70 Peru IGRA 15789.18 0.72 0.23 Venezuela IBC 2313.15 -0.65 -15.47 Currencies daily % YTD % change change Latest Brazil real 2.2043 0.60 6.92 Mexico peso 12.9439 0.19 0.67 Chile peso 554.5 1.93 -5.12 Colombia peso 1900.54 0.52 1.66 Peru sol 2.789 0.36 0.14 Argentina peso (interbank) 7.8775 0.06 -17.58 Argentina peso (parallel) 10.69 0.19 -6.45 (Reporting by Asher Levine; Editing by Jeffrey Benkoe)
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