EMERGING MARKETS-Latam currencies rally on oil spike, dovish Fed

jueves 28 de enero de 2016 11:31 GYT

By Bruno Federowski
    SAO PAULO, Jan 28 (Reuters) - Latin American currencies
rallied on Thursday on a spike in oil prices and bets that the
U.S. Federal Reserve may wait longer to increase interest rates
due to global market volatility.
    Expectations that major producers might cooperate to cut
output lifted oil prices on Thursday, fostering demand for
currencies from commodity exporters. Crude prices have fallen by
half since May on signs of a growing oversupply of oil.
    Also boosting demand for riskier assets was a Fed policy
statement on Wednesday that highlighted concerns about global
markets, which have been hard hit by the recent slump in oil
prices and worries about weaker growth in China. 
    A slower pace of U.S. rate hikes this year would benefit
emerging market assets, which would remain more attractive
relative to bonds from the world's largest economy.
    "The tone of the statement hints at policy flexibility in
the face of a shift in the balance of risks," Scotiabank
analysts wrote in a client note.
    The Colombian peso jumped 2 percent, while the
Mexican peso strengthened to its highest level in more
than a week. Traders widely expect the Mexican central bank to
extend its daily dollar auction program later on Thursday.
    The Brazilian real also rose, while yields paid on interest
rates futures contracts fell as traders bet that the country's
central bank could avoid increasing rates for longer than
expected. Minutes of the bank's last rate-setting meeting showed
most members of the bank's board believe a domestic recession
and weakness abroad will help curb inflation. 
    Latin American stock indexes and currencies at 1440 GMT:
 Stock indexes                                daily %   YTD %
                                               change  change
 MSCI Emerging Markets                724.27     1.16   -9.84
 MSCI LatAm                          1671.88     1.54  -10.01
 Brazil Bovespa                     38817.39     1.15  -10.46
 Mexico IPC                         42335.29     0.54   -1.49
 Chile IPSA                          3549.25     0.09   -3.56
 Chile IGPA                         17568.29     0.12   -3.21
 Argentina MerVal                   11090.15     2.81   -5.01
 Colombia IGBC                       8520.18     1.06   -0.32
 Venezuela IBC                      14310.86     0.06   -1.90
 Currencies                                   daily %   YTD %
                                               change  change
 Brazil real                          4.0519     0.80   -2.59
 Mexico peso                         18.2725     1.03   -5.71
 Chile peso                            709.9     0.66   -0.03
 Colombia peso                       3286.55     2.00   -3.57
 Peru sol                             3.4651    -0.03   -1.47
 Argentina peso (interbank)          13.8500     0.22   -6.26
 Argentina peso (parallel)             14.32     0.28   -0.35
 (Reporting by Bruno Federowski; Editing by Paul Simao)