EMERGING MARKETS-Brazil's real pares recent gains, current account in focus
SAO PAULO, Nov 24 (Reuters) - Brazil's currency weakened on Monday as investors digested worse-than-expected current account data, pulling back part of a sharp Friday rise driven by the outlook for a new economic policymaking team. Latin American stock markets were mostly flat, though Brazil's Bovespa stock index managed to climb for a fourth straight session. The Brazilian real opened stronger against the dollar though began to weaken shortly thereafter, with traders pointing to what may have been an overdone rally in the currency on Friday. The real strengthened over 2 percent on Friday on media reports that President Dilma Rousseff, long criticized by investors for emphasizing a heavy government hand in the economy, would name market-friendly economist Joaquim Levy as finance minister in her second term. The nomination has not yet been confirmed by the government. Optimism over the economy's future was cooled somewhat on Monday after Brazil posted its biggest current account deficit on record for the month of October. "A very strong deficit ended up weakening the real today as it suggests (dollars) are leaving the country due to more modest exports," said Andre Perfeito, chief economist at Gradual Investimentos in Sao Paulo. "We had some very abrupt moves in Brazil on Friday, which could also explain today's performance." Perfeito added that the Fed's stance on raising interest rates remains the key factor in determining the direction of the real in the medium to long term. Brazil's Bovespa stock index posted slight gains after the finance minister reports drove a 5 percent rise on Friday. State-run firms such as oil producer Petroleo Brasileiro SA , known as Petrobras, climbed, offsetting a decline in bank shares. Traders said the bank losses were mostly due to profit-taking after Brazilian financial shares posted a three-day 12.9 percent rally. Key Latin American stock indexes and currencies at 1356 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1013.53 0.91 0.17 MSCI LatAm 3134.44 0.04 -2.11 Brazil Bovespa 56277.86 0.35 9.26 Mexico IPC - - - Chile IPSA 3983.03 -0.13 7.67 Chile IGPA 19404.58 -0.09 6.46 Argentina MerVal 9976.67 3.14 85.06 Colombia IGBC 12949.38 0 -0.93 Peru IGRA 15326.92 -0.06 -2.71 Venezuela IBC 2916.72 0 6.58 Currencies daily % YTD % change change Latest Brazil real 2.5280 -0.33 -6.77 Mexico peso 13.6055 0.07 -4.23 Chile peso 593.1 0.24 -11.30 Colombia peso 2150.5 -0.28 -10.16 Peru sol 2.911 -0.03 -4.05 Argentina peso 8.5150 0.00 -23.75 (interbank) Argentina peso 13.33 1.28 -24.98 (parallel) (Reporting by Asher Levine; Editing by Chizu Nomiyama)
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