EMERGING MARKETS-Brazil's real drops on interest rate outlook
SAO PAULO, Dec 4 (Reuters) - Brazil's currency weakened on Thursday after the central bank signaled that interest rates would not rise much further in coming months. Other currencies in the region were down slightly against the dollar, while the MSCI Latin American stock index fell for the fifth session in six. Brazil's central bank raised interest rates by 50 basis points to 11.75 percent late Wednesday, though signaled in its decision statement that it could slow the pace of tightening at coming meetings given the lagging effects of past rate increases. "The market expected the central bank to be more hawkish in the statement and now it needs to adjust," said Marcos Trabbold, a trader with brokerage B&T in Sao Paulo. The Brazilian real weakened over 1 percent, while yields on Brazilian interest rate futures <0#DIJ:> dropped sharply at the short end of the curve. Brazil's benchmark Bovespa stock index also declined, erasing the previous day's gains. Losses were driven by preferred shares of state-run petroleum producer Petroleo Brasileiro SA a day after Moody's Investors Service lowered the company's baseline credit assessment, a gauge of the company's creditworthiness independent of government support. Mexico's IPC stock index fell slightly, while Chile's IPSA index was little-changed. Key Latin American stock indexes and currencies at 1548 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 987.08 0.12 -1.68 MSCI LatAm 2846.93 -2.16 -9.09 Brazil Bovespa 51094.32 -2.34 -0.80 Mexico IPC 42846.19 -0.62 0.28 Chile IPSA 3950.53 0.06 6.79 Chile IGPA 19265.31 0.02 5.70 Argentina MerVal 9778.67 1.16 81.39 Colombia IGBC 11696.24 -2.13 -10.52 Peru IGRA 15078.02 -0.2 -4.29 Venezuela IBC 2955.08 0 7.98 Currencies daily % YTD % change change Latest Brazil real 2.5837 -1.10 -8.78 Mexico peso 14.1085 -0.05 -7.64 Chile peso 610.7 -0.08 -13.85 Colombia peso 2285.49 0.11 -15.47 Peru sol 2.947 -0.10 -5.23 Argentina peso 8.5425 0.00 -24.00 (interbank) Argentina peso 13 0.38 -23.08 (parallel) (Reporting by Bruno Federowski Editing by W Simon)
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