EMERGING MARKETS-Colombian peso rises after central bank signals support

lunes 22 de febrero de 2016 12:23 GYT
 

By Bruno Federowski
    SAO PAULO, Feb 22 (Reuters) - The Colombian peso
strengthened to a two-week high on Monday after the central bank
signaled it is ready to support the currency to avoid additional
price pressures.
    Colombia's central bank announced late on Friday it will
auction $500 million in dollar call options whenever the
currency falls 3 percent from its 20-day moving average, down
from the previous 5 percent trigger. 
    Analysts cheered the bank's willingness to act but said that
intervention should be rare. They noted that the peso has rarely
moved by 3 percent from its 20-day moving average in recent
months. So far, the mechanism has never been activated.
    On Friday, the central bank also raised its benchmark rate
by 25 basis points, to 6.25 percent, and kept the door open for
further tightening as had been expected.
    The moves echoed measures adopted by Mexico's government
last week, including dollar sales in the spot market, budget
cuts and an unexpected rate hike. 
    J.P. Morgan analyst Ben Ramsey said in a client note he
expects Colombia's central bank to increase its benchmark rate
again by 25 basis points in March and April, which would allow
it to cut rates by 125 basis points between September 2016 and
January 2017. 
    The Mexican and Colombian pesos have been hard hit by
slumping oil prices, which have weighed on trade and tax revenue
and pressured inflation expectations.
    A recovery in crude prices on Monday helped rekindle demand
for emerging-market assets, after the world's oil consumer body
said it expected U.S. shale production to fall this year and in
2017. 
    Also helping sentiment was a Chinese stock rally following
the announcement that the country had decided to replace its top
securities regulator. The move followed comments by senior
policymakers signaling China could bolster its efforts to stave
off financial turmoil. 
    Global risk appetite lifted the Brazilian real beyond
4 to the U.S. dollar as it continued to outperform its peers. A
drop of more than 30 percent in the real last year has helped
Brazil's current account recover more quickly than expected,
despite political turmoil and a deep recession.
    
    Latin American stock indexes and currencies at 1440 GMT:
 Stock indexes                              daily %   YTD %
                                             change  change
                                  Latest             
 MSCI Emerging Markets              750.04     1.22   -6.69
 MSCI LatAm                        1817.57     3.75   -4.26
 Brazil Bovespa                   42944.16     3.37   -0.94
 Mexico IPC                       43782.85     0.94    1.87
 Chile IPSA                        3771.27     0.43    2.47
 Chile IGPA                       18480.84     0.38    1.81
 Argentina MerVal                 12229.84     3.41    4.75
 Colombia IGBC                     9094.48     0.79    6.40
 Venezuela IBC                    16357.04     0.04   12.12
                                                           
 Currencies                                 daily %   YTD %
                                             change  change
                                                     
                                    Latest           
 Brazil real                        3.9493     1.85   -0.06
 Mexico peso                       18.0815     0.79   -4.71
                                                     
 Chile peso                         691.52     1.23    2.63
 Colombia peso                      3316.2     1.14   -4.43
 Peru sol                            3.522    -0.17   -3.07
 Argentina peso (interbank)        15.1000    -0.20  -14.02
                                                     
 Argentina peso (parallel)            15.3     0.33   -6.73
                                                     
 
 (Reporting by Bruno Federowski; Editing by Paul Simao)