EMERGING MARKETS-Latam markets rally on expectations of stable U.S. rates
(Adds stock markets, updates with closing prices) By Bruno Federowski SAO PAULO, Feb 4 (Reuters) - Latin American currencies and stocks rallied on Thursday on bets that the U.S. Federal Reserve could take longer than anticipated to raise interest rates amid global financial turmoil. Mexico's IPC stock index rose 1.1 percent to its highest level since late December, while Brazil's Bovespa closed up 3.1 percent, its best showing in more than three weeks. 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, driving demand for emerging market assets. 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 1.8 percent, tracking a rise in copper prices, while the Brazilian real briefly strengthened to its highest since December to about 3.85 per U.S. dollar, before closing the day up 0.6 percent. The Mexican peso fell 0.5 percent in a volatile session after the central bank held borrowing costs steady on Thursday, but said it was closely monitoring risks to inflation from a slump in the currency. Latin American stock indexes and currencies at 2100 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 741.02 2.68 -9.13 MSCI LatAm 1778.56 3.55 -6.14 Brazil Bovespa 40821.74 3.11 -5.83 Mexico IPC 43751.93 1.14 1.80 Chile IPSA 3666.26 2.11 -0.38 Chile IGPA 18027.02 1.84 -0.69 Argentina MerVal 11421.99 2.7 -2.17 Colombia IGBC 8671.33 0.7 1.45 Venezuela IBC 14669.95 -0.17 0.56 Currencies daily % YTD % change change Latest Brazil real 3.8929 0.59 1.37 Mexico peso 18.2540 -0.45 -5.94 Chile peso 697.2 1.83 1.76 Colombia peso 3314 1.65 -4.57 Peru sol 3.4761 0.37 -1.82 Argentina peso (interbank) 14.2300 -0.42 -9.61 Argentina peso (parallel) 14.21 0.49 0.42 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli, Diane Craft)
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