EMERGING MARKETS-Latam currencies extend gains on China hopes
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 Paulo. Key Latin American stock indexes and currencies at 1600 GMT: Stock indexes daily % YTD % change change Latest 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 Latest 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)
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