EMERGING MARKETS-Mexico peso hits all-time low on oil, global growth worries
By Bruno Federowski SAO PAULO, Feb 11 (Reuters) - The Mexican peso hit a record low on Thursday as a lingering slump in oil prices and concerns over global growth drove investors away from riskier assets. Worried that lower crude prices and weakness in world No. 2 economy China could have lasting effects on the global economy, investors have been unwinding trades that sought to profit from high interest rates in emerging markets. The Mexican peso has been a major victim as many investors use the highly liquid currency to hedge against Latin American assets in general. The peso slumped for a sixth day, to an all-time low of 19.174 per U.S. dollar. Bets that financial turmoil will not derail the U.S. Federal Reserve's plan to increase rates later this year also weighed on sentiment. Fed Chair Janet Yellen said on Wednesday the U.S. central bank will proceed with "gradual" rate hikes despite pressure stemming from abroad. Brazil's currency and stocks dropped, also hit by worries that the government could loosen fiscal policy to fight a deepening economic recession despite double-digit inflation. "There is no room for fiscal flexibility given the current conditions of the Brazilian economy," said Silvio Campos Neto, an economist at Tendências consultancy in São Paulo. Shares of Cielo SA dropped almost 6 percent after Reuters reported that rival Elavon do Brasil could be fully sold to a holding company controlled by Banco Bradesco SA and Banco do Brasil, Cielo's controlling shareholders. Latin American stock indexes and currencies at 1430 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 714.20 -2.24 -8 MSCI LatAm 1675.51 -2.26 -6.32 Brazil Bovespa 39434.55 -2.33 -9.03 Chile IPSA 3646.75 -0.79 -0.91 Chile IGPA 17928.29 -0.73 -1.23 Argentina MerVal 11041.67 -2.68 -5.43 Venezuela IBC 14588.58 0.04 0.00 Currencies daily % YTD % change change Latest Brazil real 3.9740 -0.99 -0.68 Mexico peso 19.1300 -1.02 -9.93 Chile peso 714.4 -0.21 -0.66 Colombia peso 3437 -1.35 -7.79 Peru sol 3.5131 -0.20 -2.82 Argentina peso (interbank) 14.5000 0.00 -10.47 Argentina peso (parallel) 14.2 0.42 0.49 (Reporting by Bruno Federowski; Additional reporting by Paula Arend Laier; Editing by Bernadette Baum)
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