EMERGING MARKETS-Latam currencies extend gains on China hopes

miércoles 2 de marzo de 2016 12:41 GYT

By Bruno Federowski
    SAO PAULO, March 2 (Reuters) - Latin American currencies
extended recent gains on Wednesday as continuing hopes of
economic stimulus in China offset volatility in oil prices.
    Expectations Beijing could loosen policy even further have
been growing steadily since the country's central bank cut its
reserve requirement ratio on Monday, injecting an estimated $100
billion worth of long-term cash into the economy. 
    China stocks climbed on Wednesday, despite Moody's decision
to cut its outlook on the country's debt and a recent batch of
weak economic data. 
    Prospects of faster growth in the world's second-biggest
economy allayed concerns of wider global economic weakness,
lifting commodity prices. Prices of copper hit their highest
since Nov. 16, driving the Chilean peso higher.
    Gains in the Mexican peso were contained by
volatility in oil prices on record high U.S. stockpiles.
Nevertheless, oil-heavy Colombia's peso rallied,
supported by expectations of higher rates.
    Yields paid on Brazilian interest rates futures contracts
<0#2DIJ:> fell slightly ahead of a central bank rate-setting
decision later on Wednesday. 
    Investors bet firmly on rates remaining stable at 14.25
percent as the country slides into a deep recession, despite
double-digit inflation.
    However, traders said a unanimous decision could foster bets
on a cut early next year, as two of the eight-member committee
have been voting for a hike since last November.
    "There's no doubt about the outcome of today's meeting but
the market is convinced that the central bank is now more
inclined to cutting rates than increasing them," said Thiago
Castellan Castro, a trader with Renascença brokerage in São
    Key Latin American stock indexes and currencies at 1600 GMT:
 Stock indexes                               daily %   YTD %
                                              change  change
 MSCI Emerging Markets               768.41     2.06   -5.19
 MSCI LatAm                         1886.76     2.08    1.01
 Brazil Bovespa                    44390.45     0.61    2.40
 Mexico IPC                        44642.04     0.97    3.87
 Chile IPSA                         3759.19     0.39    2.15
 Chile IGPA                        18446.17     0.37    1.62
 Argentina MerVal                  13181.24    -0.31   12.90
 Colombia IGBC                      9345.70     0.56    9.34
 Venezuela IBC                     16409.65    -0.06   12.49
 Currencies                                  daily %   YTD %
                                              change  change
 Brazil real                         3.8958     1.14    1.31
 Mexico peso                        17.8500     0.36   -3.47
 Chile peso                           686.3     0.86    3.41
 Colombia peso                      3193.95     1.08   -0.77
 Peru sol                            3.5151     0.06   -2.88
 Argentina peso (interbank)         15.6900     0.70  -17.26
 Argentina peso (parallel)            15.83     0.19   -9.85

 (Reporting by Bruno Federowski; Editing by Andrea Ricci)