EMERGING MARKETS-Brazil's real firms despite credit outlook lowering by Fitch

jueves 9 de abril de 2015 14:01 GYT
 

SAO PAULO, April 9 (Reuters) - The Brazilian real
  firmed on Thursday in a volatile session after
Fitch revised Brazil's sovereign rating outlook to "negative,"
while Mexico's peso weakened its most in almost a month
on expectations for higher U.S. interest rates.
    The region's equities markets continued to rally, with the
MSCI Latin American stock index up for the
seventh session in eight.
    The real reversed early gains after Fitch Ratings lowered
Brazil's long-term foreign and local currency issuer default
ratings outlook to "negative" from "stable," citing the
country's continued economic underperformance and an increase in
government debt. 
    The currency bounced back later in the session, however, to
trade 0.32 percent stronger on the day to the dollar as traders
weighed the possibility that closely-watched fiscal adjustments,
needed to stave off a loss of Brazil's investment grade, would
make it cleanly through Congress.
    "We still have a more benign outlook, with the market
believing that the government will find it easier to get the
fiscal measures approved," said economist Paulo Petrassi of Leme
Investimentos in Florianopolis, Brazil. 
    Elsewhere in Latin America, currencies were trading mostly
weaker against the dollar after encouraging labor market data in
the U.S. upped expectations that interest rates in the world's
largest economy could rise sooner rather than later.
 
    The Mexican peso led losses in the region, falling about 1.1
percent and crossing back over the 15-per-dollar threshold.
    Mexico's peso last month weakened to historic lows against
the dollar, hammered by a slump in oil prices and fears that an
imminent U.S. rate hike may spur a capital flight from emerging
markets.
    "We cannot discard the possibility that prices will increase
more than expected in response to the weaker (peso) in the
coming months," BNP Paribas economist Nader Nazmi wrote in a
client report on Thursday, adding that little inflation
pass-through has been seen so far from the currency's drop.
    Among the five most-traded currencies in Latin America, only
the Mexican peso is expected to strengthen against the dollar
over the next 12 months, according to a Reuters poll on
Thursday. 
    The rest of the region, which suffers from a deep and
apparently long-lasting decline in the price of its commodity
exports, will probably maintain steady exchange rates at best,
according to the poll of about 100 strategists and economists.
    In equities markets, Brazil's benchmark Bovespa index
 reversed early gains as shares of banks plunged on
concern the government might be preparing steps to raise
taxation of commercial banking activities to help plug a
swelling budget deficit. 
    
    Key Latin American stock indexes and currencies at 1710 GMT:
        
 Stock indexes             Latest          Daily   YTD pct
                                             pct    change
                                          change  
 MSCI Emerging Markets        1,027.48      0.63      6.77
                                                  
 MSCI LatAm                   2,619.55      0.27     -4.22
                                                  
 Brazil Bovespa              53,422.29     -0.45      6.83
 Mexico IPC                     45,131      0.33      4.60
 Chile IPSA                    4,007.5      0.39      4.06
 Chile IGPA                  19,471.91      0.38      3.19
 Argentina MerVal            11,459.31      1.63     33.57
                                                  
 Colombia IGBC                10,255.8      0.19    -11.85
 Peru IGRA                   12,778.88     -0.18    -13.62
 Venezuela IBC                5,386.97     -0.06     39.60
                                                          
 Currencies                     Latest     Daily   YTD pct
                                             pct    change
                                          change  
 Brazil real                    3.0450      0.32    -12.73
 Mexico peso                   15.0777     -1.13     -2.21
 Chile peso                      615.8     -0.62     -1.53
 Colombia peso                2,495.99     -0.19     -4.33
 Peru sol                       3.1141     -0.39     -4.34
 Argentina peso                 8.8425      0.00     -3.31
 (interbank)                                      
                                                  
 Argentina peso                  12.34      0.89     13.45
 (parallel)                                       
                                                  
 
 (Reporting by Asher Levine and Flavia Bohone; Editing by Alan
Crosby)