EMERGING MARKETS-Fed's Yellen speech provides some balm for Latam assets

martes 29 de marzo de 2016 19:15 GYT
 

(Recasts after Yellen speech, updates prices)
    By Bruno Federowski
    SAO PAULO, March 29 (Reuters) - Mexico's peso and stock
market rose on Tuesday, erasing earlier losses, following
comments by Federal Reserve Chair Janet Yellen who said the U.S.
central bank should proceed cautiously in deciding to raise
interest rates.
    Latin American currencies had fallen after opening, on fears
Yellen could reinforce the Fed's intention to raise rates sooner
rather than later, a move which could drain capital away from
high-yielding emerging markets.
    Yet in her first remarks since the Fed opted to hold rates
steady two weeks ago, Yellen said inflation has not yet proven
durable against the backdrop of looming global risks to the U.S
economy, including still-low oil prices and concerns over China.
 
    The Mexican peso closed at 17.348 pesos per dollar, up 0.40
percent from the previous day. The benchmark Mexican stock
index, the IPC, gained 0.60 percent.
    In Brazil, where the largest party in Congress announced on
Tuesday it was leaving President Dilma Rousseff's governing
coalition, the Bovespa stock index also closed up,
rising 0.62 percent thanks to Yellen's comments. 
    However, unlike the peso, the Brazilian real  
failed to rise against the dollar, losing 0.34 percent, after
the Brazilian central bank once again acted to weaken the
currency. 
    The bank sold hundreds of millions of dollars in reverse
currency swaps, which function like buying greenback in futures
markets, feeding speculation that it could favor a weaker
currency to protect exports.
    "The central bank is signaling that it will act to contain
the real's strength," said Ricardo Gomes da Silva, a trader with
Correparti brokerage. 
    The decision by the Brazilian Democratic Movement Party
(PMDB) to abandon Rousseff's coalition cripples her fight
against impeachment proceedings in Congress. 
    Under Brazil's presidential system, Rousseff will remain in
office but the break sharply raises the odds she could be
impeached in a matter of months, which would put Vice President
Michel Temer, leader of the PMDB, in the presidential seat.
    Rousseff's chief of staff Jaques Wagner said she will
announce a new governing coalition before the end of the week.

 (Reporting by Bruno Federowski; Additional reporting by Paula
Arend Laier; editing by Meredith Mazzilli and Diane Craft)