EMERGING MARKETS-Latam currencies strengthen on bets of dovish Fed

miércoles 27 de enero de 2016 10:26 GYT

By Bruno Federowski
    SAO PAULO, Jan 27 (Reuters) - Latin American currencies
strengthened on Wednesday on bets that global market volatility
could lead the U.S. Federal Reserve to strike a cautious tone
when announces its decision on interest rates later in the day.
    Traders widely expect the Fed to stand pat after raising
rates for the first time in a decade late last year.
    A slump in oil prices and growing signs of weakness in
China's economy have stoked bets that the Fed could proceed with
only one increase later this year. 
    "We believe the Fed will be conservative and keep rates
steady for a while," said Ricardo Gomes da Silva, a trader at
Correparti brokerage in São José dos Pinhais, Brazil.
    This could ease the pressure over emerging market
currencies, which otherwise could suffer from outflows triggered
by higher rates in the world's largest economy.
    The Mexican peso rose 0.5 percent and the Colombian
peso advanced 0.4 percent, despite a resumed decline in
oil prices after a brief rebound the day before.
    The Brazilian real strengthened 0.8 percent in thin trading 
as investors awaited the release of the minutes of the central
bank's last rate-setting meeting. The Brazilian central bank
confounded investors last week by leaving its benchmark rate
unchanged despite repeatedly dropping hints of an increase.
    Latin American stock indexes and currencies at 1400 GMT:
 Stock indexes                                 daily %   YTD %
                                                change  change
 MSCI Emerging Markets                 716.15      1.1  -10.81
 MSCI LatAm                           1635.58     0.92  -11.43
 Brazil Bovespa                      37682.86     0.49  -13.07
 Chile IPSA                           3534.58    -0.17   -3.96
 Chile IGPA                          17498.47    -0.16   -3.60
 Currencies                                    daily %   YTD %
                                                change  change
 Brazil real                           4.0366     0.77   -2.22
 Mexico peso                          18.3780     0.47   -6.25
 Chile peso                             714.9     0.36   -0.73
 Colombia peso                        3346.94     0.41   -5.31
 Peru sol                               3.463     0.00   -1.41
 Argentina peso (interbank)           13.8750    -0.18   -6.43
 Argentina peso (parallel)              14.31     0.28   -0.28

 (Reporting by Bruno Federowski; Editing by Nick Zieminski)