EMERGING MARKETS-U.S. data hurts Latam currencies; stocks fall on profit-taking
SAO PAULO, April 17 (Reuters) - Latin American currencies weakened on Friday after United States inflation data upped bets that the Federal Reserve would be less inclined to keep interest rates unchanged. Equity markets across the region also fell, with the MSCI Latin American stock index dropping for the first session in four. Data on Friday showed U.S. consumer prices rose for a second straight month in March, signs of some inflation that should keep the Fed on course to start raising interest rates this year. Expectations of higher U.S. interest rates tend to weaken demand for riskier assets such as Latin American securities. "Core inflation was greater than expected and that gives the Fed more room to consider raising rates, considering recent data have been disappointing," said João Paulo De Gracia Correa, currency manager at brokerage Correparti in Curitiba, Brazil. The Brazilian real snapped a three-session, 3 percent rally, shedding 0.85 percent to 3.04 per dollar. Brazil also released inflation data on Friday, with the IPCA-15 index coming in above forecasts and reinforcing expectations of further rate increases by the central bank in coming months. Yields on Brazilian interest rate futures contracts <0#DIJ:> rose across the board, with the most heavily-traded contract, Jan. 2017, adding 12 basis points to 13.16 percent. Other Latin American currencies such as the Mexican and Chilean pesos weakened more modestly. The Colombian peso fell after a three-day rally. Colombia's government late on Thursday cut its economic growth forecast for 2015 to between 3.5 percent and 4 percent, down from its previous estimate of 4.2 percent due to the sharp fall in oil prices, the country's main export. Brazil's benchmark Bovespa stock index pulled back further from the 4-1/2 month high reached on Wednesday as investors took profits from shares of widely-traded firms such as banks and commodities exporters. Profit-taking also weighed on Mexico's IPC stock index , which headed towards its biggest one-day loss in over three weeks on Friday after closing at a nearly seven-month high on Thursday. Key Latin American stock indexes and currencies at 1408 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 1045.03 -0.69 10.03 MSCI LatAm 2630.6 -1.08 -2.5 Brazil Bovespa 53986.53 -1.26 7.96 Mexico IPC 45187.78 -0.64 4.73 Chile IPSA 4045.77 -0.57 5.06 Chile IGPA 19635.24 -0.5 4.05 Argentina MerVal 0 0 -100.00 Colombia IGBC 10468.98 -0.41 -10.02 Peru IGRA 13133.35 -0.04 -11.23 Venezuela IBC 5358.14 -3.29 95.80 Currencies daily % YTD % change change Latest Brazil real 3.0408 -0.85 -22.49 Mexico peso 15.262 -0.60 -14.62 Chile peso 612.5 -0.20 -14.11 Colombia peso 2481.19 0.03 -22.13 Peru sol 3.126 -0.19 -10.65 Argentina peso 8.8625 0.06 -26.74 (interbank) Argentina peso 12.67 1.03 -21.07 (parallel) (Reporting by Asher Levine and Flavia Bohone; Editing by Meredith Mazzilli)
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