EMERGING MARKETS-Brazil's real approaches 2.50/dlr on poll talk; Argentina tumbles
By Asher Levine SAO PAULO, Oct 2 (Reuters) - Brazil's currency came within a hair's breadth of touching the closely watched 2.50-per-dollar level on Thursday amid speculation over upcoming electoral polls, while Argentine markets plunged on the nomination of a new central bank chief. The broader MSCI Latin American stock index fell for the fourth straight day, although most of the region's currencies traded slightly stronger against the dollar. Brazil's real spent most of the morning in positive territory but began to sink as talk spread that two voter polls due later on Thursday would show President Dilma Rousseff extending her lead ahead of Sunday's election. The real tends to weaken when polls show Rousseff gaining, as many investors believe a more market-friendly administration could help boost demand for Brazilian assets. The real fell as low as 2.4975 to the dollar, its weakest level since December 2008, before backing off slightly. "This is the new norm," said Paulo Petrassi, an economist with Leme Investimentos in Florianopolis, Brazil. "2.50 is a psychological barrier, but we will break it if Rousseff keeps gaining. Once we're past that, it's just going higher." Other currencies in the region, including the Mexican, Chilean and Colombian pesos , strengthened slightly. Argentina's black-market peso weakened, however, while the country's stocks and bonds fell sharply. Investors were reacting to the nomination of Alejandro Vanoli as the new governor of Argentina's central bank, with many wary over potential shifts in policy. Vanoli is seen as sympathetic to government intervention in Argentina's ailing economy, such as implementing deeper currency and trade controls. In equities markets, Brazil's Bovespa index edged higher on bargain-hunting following a 7.6 percent decline over the previous three days. Mexican and Chilean equities indexes both tracked global stock markets lower after European Central Bank President Mario Draghi failed to outline a specific stimulus program for the euro zone's flagging recovery. Key Latin American stock indexes and currencies at 1705 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 991.21 -0.57 -0.58 MSCI LatAm 3083.75 -0.53 -3.14 Brazil Bovespa 53085.38 0.43 3.06 Mexico IPC 44041.87 -0.73 3.08 Chile IPSA 3840.55 -1.07 3.82 Chile IGPA 18810.41 -0.98 3.20 Argentina MerVal 10450.729 -9.25 93.85 Colombia IGBC 13308.28 -0.89 1.81 Peru IGRA 15858.72 -0.67 0.67 Venezuela IBC 2883.18 -0.84 5.36 Currencies daily % YTD % change change Latest Brazil real 2.4832 0.04 -5.09 Mexico peso 13.3955 0.43 -2.73 Chile peso 596.8 0.23 -11.85 Colombia peso 2019.19 0.37 -4.32 Peru sol 2.897 -0.14 -3.59 Argentina peso 8.4500 0.03 -23.17 (interbank) Argentina peso 15.55 0.58 -35.69 (parallel) (Editing by Lisa Von Ahn)
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