EMERGING MARKETS-Latin American currencies spike as Fed fuels risk appetite
SAO PAULO, March 20 (Reuters) - Latin American currencies jumped on Friday after investors began interpreting the Fed's recent policy signals as an invitation to step back into riskier assets. Equities also rose, with the MSCI Latin American stock index notching its biggest one-day advance in over a month. The U.S. Federal Reserve this week led investors to expect a more dovish policy stance than many had originally expected, spurring portfolio inflows into riskier markets that offer higher returns. In addition, concern over the broader impact of Greece's financial crisis eased on Friday when the nation said it was moving swiftly to meet creditors' demands for a detailed economic reform plan. "It's mostly a spillover from what we saw coming out of the Fed," said Kathryn Rooney Vera, a strategist with Bulltick Capital Markets in Miami. "The Fed is clear...when they start tightening it will be so slow and mitigated that it will not have a big immediate impact. The market sees that risk is indeed attractive and there is a search for yield." The Brazilian real nearly rolled back the previous session's loss, strengthening to about 3.22 per dollar. Brazil's currency has weakened about 17.5 percent against the dollar this year, however, as concerns over economic recession and a potential sovereign credit downgrade weigh. "The whole world is selling dollars and the result is a respite here," said Reginaldo Galhardo, head of currency trading at Sao Paulo brokerage Treviso. Other Latin American currencies rose as well, with Colombia's peso posting its biggest one-day gain in over six weeks. The country's currency was also boosted by higher prices for oil, its main export. Equities also rebounded on Friday, with Brazil's Bovespa stock index erasing the previous session's loss. Shares of private education firm Estacio Participacoes SA jumped over 10 percent after the company released an optimistic forecast for future growth. Key Latin American stock indexes and currencies at 1524 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 970.11 0.53 0.91 MSCI LatAm 2467.06 2.78 -12 Brazil Bovespa 51781.54 1.63 3.55 Mexico IPC 44269.05 0.34 2.60 Chile IPSA 3884.62 0.55 0.87 Chile IGPA 18931.29 0.45 0.32 Argentina MerVal 11380.89 2.08 32.66 Colombia IGBC 9985.96 0.42 -14.17 Peru IGRA 12629.37 0.38 -14.63 Venezuela IBC 4706.02 0.03 21.96 Currencies daily % YTD % change change Latest Brazil real 3.2206 2.26 -17.48 Mexico peso 15.066 1.39 -2.14 Chile peso 634.7 0.80 -4.46 Colombia peso 2588.24 1.61 -7.74 Peru sol 3.09 0.29 -3.59 Argentina peso 8.7950 0.00 -2.79 (interbank) Argentina peso 12.77 0.70 9.63 (parallel) (Reporting by Asher Levine and Bruno Federowski)
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