EMERGING MARKETS-Latam FX drops on Fed anxiety; real up on finance chief talk
SAO PAULO, Nov 19 (Reuters) - Most Latin American currencies weakened on Wednesday on caution before the release of minutes from the latest U.S. Federal Reserve meeting, but the Brazilian real was supported by speculation that President Dilma Rousseff might appoint a market-friendly name to head the country's finance ministry. The currencies of Mexico, Chile, and Colombia slid between 0.3 percent and 0.5 percent as investors braced for the possibility that the Fed minutes will affirm the more hawkish policy statements released by the bank a few weeks ago. Latin American assets could come under renewed selling pressure if U.S. policymakers signal they're ready to raise interest rates earlier than expected, reducing investors' appetite for risk. In Brazil, however, expectation about the makeup of Rousseff's new economic team has been increasingly driving markets. Investors were particularly anxious to know who will replace Finance Minister Guido Mantega because that choice will signal whether the re-elected president is willing to alter economic policy. The Brazilian real gained 0.2 percent while the benchmark Bovespa stock index rose 0.9 percent as investors were encouraged by media reports that Rousseff was considering adding market-friendly names to her economic team. The president is "close" to naming a new finance minister, a government official told Reuters on condition of anonymity. Some investors have speculated the announcement could come as early as Wednesday since Thursday is a market holiday in most of Brazil, which would give markets time to digest the pick. Shares of Brazil's state-run oil company Petroleo Brasileiro SA, or Petrobras, gained 1.6 percent but were still down more than 40 percent since mid October. The stock initially dropped on investor disappointment over Rousseff's re-election and, more recently, over a growing corruption scandal that could force the oil company to write down billions of dollars. Key Latin American stock indexes and currencies at 1810 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging 987.48 -0.12 -1.4 Markets MSCI LatAm 2965.62 1.01 -8.27 Brazil Bovespa 52536.12 0.91 2.00 Mexico IPC 44067.91 1.33 3.14 Chile IPSA 3968.23 0.88 7.27 Chile IGPA 19311.46 0.75 5.95 Argentina MerVal 9732.88 -0.63 80.54 Colombia IGBC 12802.42 -0.33 -2.06 Peru IGRA 15089.29 -0.58 -4.22 Venezuela IBC 2844.47 -0.75 3.94 Currencies daily % YTD % change change Latest Brazil real 2.5832 0.23 -8.76 Mexico peso 13.6112 -0.39 -4.27 Chile peso 600.8 -0.45 -12.43 Colombia peso 2159.8 -0.46 -10.55 Peru sol 2.927 0.00 -4.58 Argentina peso 8.5125 0.03 -23.73 (interbank) Argentina peso 13.5 0.37 -25.93 (parallel) (Reporting by Paula Laier and Bruno Federowski, writing by Walter Brandimarte; Editing by Peter Galloway)
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