EMERGING MARKETS-Latam currencies rise to monthly highs on appetite for risk
(Recasts with updated prices, adds Mexico) By Bruno Federowski SAO PAULO, March 31 (Reuters) - Currencies in Latin America strengthened on Thursday, with Peru's sol hitting its highest in nearly five months, supported by continued expectations the U.S. Federal Reserve would be slow to raise rates in coming months. The Brazilian real also rose, touching a seven-month high, after the central bank showed it would not stand in the way of a rally driven by a shifting political outlook. Brazil's benchmark stock index finished March with its biggest monthly gain in more than 13 years. The Fed's predicted slower pace of rate increases supported risk appetite for a third day, after Fed Chair Janet Yellen earlier this week indicated the U.S. central bank would proceed cautiously in tightening policy. The Peruvian currency jumped 1.8 percent to its highest since early November, while Chile's peso gained 0.9 percent to an eight-month high as traders scaled back forecasts of U.S. rate increases. Brazil's currency firmed after the central bank sold less than half the reverse currency swaps offered in an auction for the second straight day. "It looks like the central bank wants to slow the currency's rally, but not at any cost," said Glauber Romano, a trader with Intercam brokerage in São Paulo. Reverse currency swaps function like buying dollars in futures markets and are seen as a way for the central bank to limit the currency's gains. The real has rallied this month on bets President Dilma Rousseff's potential impeachment could attract capital to the crisis-ridden economy. Brazil's benchmark Bovespa stock index fell but still posted its biggest monthly gain since October 2002, supported by shares of state-controlled companies such as Petroleo Brasileiro SA and Banco do Brasil SA . Mexico's benchmark IPC stock index fell 0.7 percent but still posted its best quarter since the end of 2012. The peso in Mexico, the region's second-biggest economy, closed down 0.3 percent after Moody's rating agency changed the country's outlook to negative from stable due to concerns about the government's balance sheet. Key Latin American stock indexes and currencies at 2058 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 836.80 0.34 5.37 MSCI LatAm 2,168.49 -0.51 18.51 Brazil Bovespa 50,055.27 -2.33 15.47 Mexico IPC 45,881.08 -0.67 6.76 Chile IPSA 3,937.49 -0.23 6.99 Chile IGPA 19,296.65 -0.15 6.31 Argentina MerVal 12,992.43 0.92 11.28 Colombia IGBC 9,871.50 1.15 15.49 Venezuela IBC 14,574.79 -1.96 -0.09 Currencies Latest Daily YTD pct pct change change Brazil real 3.5935 0.72 8.96 Mexico peso 17.2725 -0.25 -0.25 Chile peso 667 0.92 6.02 Colombia peso 2,999.51 0.48 5.36 Peru sol 3.3041 1.84 3.22 Argentina peso (interbank) 14.6500 -0.21 -12.84 Argentina peso (parallel) 15.21 0.59 -6.59 (Additional reporting by Anna Yukhananov; Editing by Nick Zieminski and Chris Reese)
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