EMERGING MARKETS-Latam markets rally after Fed
SAO PAULO, March 18 (Reuters) - Latin American currencies reversed early losses on Wednesday after the Federal Reserve signaled it could wait longer than some investors were expecting to raise U.S. interest rates. Equities also rallied, with the broader MSCI Latin American stock index extending early gains. The Fed on Wednesday removed the word 'patient' from its policy-setting statement as expected, though investors shifted their bets from a June hike to a September one after the central bank downgraded its expected pace of growth and inflation. "It looks like they are going to hold on for a bit," said Paulo Celso Nepomuceno, a trader with Coinvalores in Sao Paulo. Brazil's real , which had traded as low as 3.279 to the dollar, reversed its losses after the Fed's statement to trade around 3.22. The real saw additional downward pressure on Wednesday after a government source told Reuters that the Brazilian central bank had little room to continue implementing its currency swap program. The swap program, which helps support the currency, is scheduled to end on March 31, though it could be extended. The program's next steps will be decided in coming weeks, central bank president Alexandre Tombini said on Wednesday, noting the program has a "significant size." Other currencies in the region jumped as well, with Colombia's peso, also supported by a rise in oil prices, notching its biggest one-day gain in over a month. Latin American stock markets surged, with Brazil's Bovespa index touching its highest since March 2. Gains were led by shares of the most widely traded companies such as lender Itau Unibanco Holding SA and state-run oil producer Petroleo Brasileiro SA, known as Petrobras. Both stocks tend to attract a large share of foreign investors and often rise on the outlook for greater global liquidity. Key Latin American stock indexes and currencies at 1843 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 962.04 1.37 -0.76 MSCI LatAm 2438.08 2.62 -12.9 Brazil Bovespa 51482.45 2.38 2.95 Mexico IPC 43923.07 0.37 1.80 Chile IPSA 3861.61 0.31 0.28 Chile IGPA 18839.78 0.24 -0.16 Argentina MerVal 11115.699 1.16 29.57 Colombia IGBC 9934.05 1 -14.62 Peru IGRA 12595.71 0.53 -14.86 Venezuela IBC 4704.73 0.78 21.92 Currencies daily % YTD % change change Latest Brazil real 3.2246 0.14 -17.59 Mexico peso 15.2263 1.01 -3.17 Chile peso 642.5 -0.12 -5.62 Colombia peso 2626 1.26 -9.06 Peru sol 3.091 0.23 -3.62 Argentina peso 8.7900 -0.03 -2.73 (interbank) Argentina peso 12.91 -0.23 8.44 (parallel) (Reporting by Asher Levine and Bruno Federowski; Editing by James Dalgleish)
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