EMERGING MARKETS-Brazil currency leads Latam losses on political woes

miércoles 23 de marzo de 2016 17:30 GYT

(Adds other markets, updates prices)
    By Bruno Federowski
    SAO PAULO, March 23 (Reuters) - Brazil's currency led losses
in Latin American markets on Wednesday on concerns that a
political crisis threatening President Dilma Rousseff may drag
on longer than expected, while the central bank moved to weaken
the real for a third straight day.
    Latin American currencies weakened as traders reconsidered
their bets on U.S. monetary policy after Federal Reserve
policymakers encouraged expectations of at least two
quarter-percentage-point interest rate increases this year.
    A slump in world crude prices helped dampen sentiment after
a higher-than-expected U.S. inventory build. 
    "The odds of a U.S. interest rate increase have risen and
that, coupled with a drop in oil prices, is hurting
commodity-related currencies," said Carlos Vieira, an economist
with Lerosa Investimentos brokerage in São Paulo.
    Rousseff said on Tuesday she will not resign despite
Brazil's worst political crisis in years, saying she had not
committed any crimes. 
    Later on Tuesday, a Supreme Court Justice questioned a
decision to make public a taped conversation between Rousseff
and former President Luiz Inácio Lula da Silva that sparked mass
protests against the government last week. 
    Judge Teori Zavascki also ordered the wiretap case returned
to the jurisdiction of the top court, a move traders believe
could prolong Brazil's worst political crisis in two decades.
    Brazilian markets have rallied in recent weeks on hopes
Rousseff's eventual ouster could rekindle investor sentiment and
lay the groundwork for an economic recovery. Many investors also
booked profits on the rally, helping drive shares of
state-controlled companies lower.
    The Brazilian real weakened 2.1 percent, more than
its Latin American peers, as the central bank acted for a third
day in a row to soften the currency. Many traders believe the
bank could be aiming for a weaker real to help exporters deal
with the deep economic recession.
    Brazil's benchmark stock index also fell 2.6
percent, while Argentina's MerVal index fell 3.3 percent
in thin trading ahead of a long holiday weekend, dragged down by
a 4 percent tumble in oil prices.
    Mexico's peso fell 1.5 percent to 17.5875 per U.S.
dollar, its steepest loss since mid-January.

    Key Latin American stock indexes and currencies at 2055 GMT:
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets            821.71     -1.06      3.47
 MSCI LatAm                      2094.92     -3.04     14.49
 Brazil Bovespa                 49690.05     -2.59     14.63
 Mexico IPC                     45647.57      0.03      6.21
 Chile IPSA                      3899.26     -1.31      5.95
 Chile IGPA                     19116.05     -1.13      5.31
 Argentina MerVal               12499.17      -3.3      7.06
 Colombia IGBC                   9758.46      0.15     14.17
 Venezuela IBC                  14957.41      0.04      2.53
 Currencies                                daily %     YTD %
                                            change    change
 Brazil real                      3.6755     -2.09      6.88
 Mexico peso                     17.5875     -1.50     -2.07
 Chile peso                          678     -0.68      4.47
 Colombia peso                   3066.93     -1.22      3.23
 Peru sol                         3.3781      0.85      1.05
 Argentina peso (interbank)      14.4900     -0.69    -11.61
 Argentina peso (parallel)         15.25      0.59     -6.87
 (Reporting by Bruno Federowski, Additional reporting by Anna
Yukhananov; Editing by G Crosse and James Dalgleish)