EMERGING MARKETS-Latam currencies weaken as oil extends slump
By Bruno Federowski SAO PAULO, Jan 20 (Reuters) - Latin American currencies weakened on Wednesday as oil prices slumped to 13-year lows, extending an emerging-market rout that began at the start of the year. Growing concerns about global oversupply drove U.S. crude prices to their lowest since 2003, hurting demand for riskier assets. Chinese stocks also fell as lower energy prices offset expectations of new economic stimulus in the world's top consumer of commodities. The Mexican peso set an all-time low but pared losses after data showed a surprising drop in U.S. consumer prices. Some traders bet the numbers might prompt the U.S. Federal Reserve to increase rates more slowly than originally expected in coming months. The Brazilian real dropped 0.5 percent, and the country's Bovespa stock index fell to its lowest since 2009. Yields paid on short-term interest rate futures contracts fell for the second straight day ahead of a central bank interest rate decision after the market close. Traders continued to unwind bets that the bank would increase its benchmark rate sharply to fight stubbornly high inflation, despite a deepening recession. The bank's president said on Tuesday that he would take into account a "significant" reduction in the country's growth outlook. "The fact is that the central bank's statement was surprising," said economist Eduardo Velho of INVX Global Partners in São Paulo. "Let's wait and see how it intends to solve this dilemma." Latin American stock indexes and currencies at 1435 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 694.04 -2.85 -10.04 MSCI LatAm 1582.59 -2.14 -11.62 Brazil Bovespa 37520.65 -1.41 -13.45 Mexico IPC 40257.02 -1.35 -6.33 Chile IPSA 3438.78 -1.17 -6.56 Chile IGPA 17095.51 -1.01 -5.82 Argentina MerVal 9583.3 -2.22 -17.92 Currencies daily % YTD % change change Latest Brazil real 4.0729 -0.49 -34.75 Mexico peso 18.3803 -0.55 -19.78 Chile peso 727.9 -0.37 -16.69 Colombia peso 3327.24 -0.56 -28.23 Peru sol 3.4421 -0.15 -13.45 Argentina peso (interbank) 13.4200 0.07 -36.29 Argentina peso (parallel) 14.33 0.28 -2.30 (Editing by Lisa Von Ahn)
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