EMERGING MARKETS-Colombia, Mexico pesos eye weekly gain as risk appetite returns
By Bruno Federowski SAO PAULO, Feb 26 (Reuters) - The Mexican and Colombian currencies looked set to post their second straight weekly gain on Friday as rebounding oil prices, talk of stimulus measures in China and stronger U.S. growth extended the currencies' bounce from recent all-time lows. The rally was also triggered by stronger central bank intervention policies announced last week in order to curb inflation expectations. "The measures were timely and forceful, as well as necessary to add two-way risk back into the currency market," wrote Morgan Stanley analysts in a client note about Mexico's central bank intervention. The bank only used up $2 billion in dollar sales and seemed to be successful in supporting the peso, they added. Fitch Ratings affirmed Mexico's BBB+ ratings on Friday, and affirmed a stable outlook, citing the country's diversified economic base and track record of disciplined fiscal policies. Meanwhile, Colombia did not even need to intervene in the foreign exchange market. Although the central bank reduced the threshold triggering automatic dollar call option sales, the bank has not held any auctions so far. The currencies were supported on Friday by higher crude prices and speculation that China could be preparing a new stimulus package. A stronger-than-expected revision of U.S. fourth-quarter growth also fostered appetite for riskier assets, although some traders said the data could allow the Federal Reserve to hike interest rates sooner. The Brazilian real underperformed, suffering from portfolio rebalancing trades usually conducted at the end of the month. Traders often try to influence a foreign exchange rate calculated by the central bank in the last session of the month, which is used to settle futures contracts, boosting volatility. Brazil stocks fell, pressured by a slump in shares of BRF SA. The food processor announced several management changes after posting higher-than-expected profits in the fourth quarter. Key Latin American stock indexes and currencies at 1620 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 739.69 0.59 -7.4 MSCI LatAm 1,778.57 -0.47 -2.34 Brazil Bovespa 41,762.71 -0.3 -3.66 Mexico IPC 43,361.67 -0.17 0.89 Chile IPSA 3,722.95 0.8 1.16 Chile IGPA 18,279.17 0.69 0.70 Argentina MerVal 13,003.55 0.52 11.38 Colombia IGBC 9,217.65 1.07 7.84 Venezuela IBC 16,815.21 -0.03 15.27 Currencies Latest Daily YTD pct pct change change Brazil real 3.9945 -1.15 -1.19 Mexico peso 18.1400 -0.06 -5.02 Chile peso 691.2 0.12 2.68 Colombia peso 3,303.35 0.17 -4.06 Peru sol 3.5231 0.11 -3.10 Argentina peso (interbank) 15.4600 -0.39 -16.03 Argentina peso (parallel) 15.7 -0.25 -9.11 (Reporting by Bruno Federowski; additional reporting by Paula Arend Laier, editing by G Crosse)
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