EMERGING MARKETS-Latam currencies rally on expectations of stable U.S. rates
By Bruno Federowski SAO PAULO, Feb 4 (Reuters) - Latin American currencies rallied on Thursday on bets that the U.S. Federal Reserve could take longer than anticipated to raise interest rates amid global financial turmoil. Weaker-than-expected U.S. economic data and comments by central bank officials have led some to believe the U.S. central bank could wait until next year to further tighten policy. Those expectations have led the dollar to weaken against major currencies, reducing the prices of dollar-denominated commodities. Emerging market assets also benefit directly from low U.S. rates, which make high-yielding bonds seem attractive in comparison. "If financial turmoil drives the Fed to delay a rates increase, this would turn out to be good for us," said Marcos Trabbold, a trader at B&T brokerage in São Paulo. The Chilean peso jumped 2 percent, tracking a rise in copper prices. The Mexican peso advanced 0.3 percent ahead of a central bank policy statement that is widely expected to hold rates steady and strike a cautious tone. Weakness in the U.S. dollar helped drive oil prices higher as speculation over a deal to cut crude output persisted, contributing to a rally in the Colombian peso. The Brazilian real strengthened to its highest since December to about 3.85 per U.S. dollar. Some traders raised suspicions that public banks could be unwinding positions in futures markets following an unusually high trading volume of dollar-indexed government bonds earlier this week. Latin American stock indexes and currencies at 1440 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 741.78 2.79 -9.13 MSCI LatAm 1783.85 3.86 -6.14 Brazil Bovespa 40705.96 2.82 -6.10 Mexico IPC 43724.98 1.08 1.74 Chile IPSA 3612.07 0.6 -1.85 Chile IGPA 17794.41 0.53 -1.97 Argentina MerVal 11186.45 0.58 -4.19 Colombia IGBC 8664.85 0.63 1.37 Venezuela IBC 14668.49 -0.18 0.55 Currencies daily % YTD % change change Latest Brazil real 3.8558 1.56 2.37 Mexico peso 18.1150 0.32 -4.89 Chile peso 696.6 1.95 1.88 Colombia peso 3301.7 2.06 -4.01 Peru sol 3.4741 0.43 -1.73 Argentina peso (interbank) 14.2000 -0.21 -8.57 Argentina peso (parallel) 14.23 -0.42 0.28 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli)
© Thomson Reuters 2016 All rights reserved.