EMERGING MARKETS-Mexico peso hits record low on U.S. CPI data; Brazil real rises
By Bruno Federowski SAO PAULO, Sept 16 (Reuters) - Most Latin American currencies slumped on Friday after U.S. inflation data offered additional support to expectations of a Federal Reserve rate hike this year, with the Mexican peso hitting a fresh record low against the dollar. But the Brazilian real strengthened after central bank chief Ilan Goldfajn told Reuters that financial turbulence stemming from U.S. policy tightening could deter the bank from quickly reducing its stock of currency swaps. U.S. consumer prices rose faster than expected in August as higher housing and healthcare costs more than offset a decline in gasoline prices. Uncertainty over U.S. monetary policy has been a major source of volatility ahead of next week's Fed policy meeting. Higher-yielding emerging market assets have benefited from years of abundant capital inflows that now seem to be coming to an end. Mexico's peso hit a new historic low at 19.777 per U.S. dollar with most financial markets in the country closed for a local holiday. The peso has weakened more than 4 percent so far this month, hurt by concerns U.S. Republican presidential candidate Donald Trump could win the Nov. 8 election after polls showed him gaining. The Brazilian real hovered around 3.30 per greenback as traders bet the central bank will stick to a more cautious intervention policy amid global volatility. The bank this week reduced its daily auctions of reverse currency swaps, which function like future dollar purchases from investors. "The real's tumble (over the past week) to 3.30 per U.S. dollar was quick and the central bank's decision to reduce swap auctions showed discomfort," analysts with Lerosa Investimentos brokerage wrote in a client note. Goldfajn also said the bank cannot rule out any currency intervention tools, even the use of international reserves, to reduce excess volatility in the future. Key Latin American stock indexes and currencies at 1625 GMT: Stock indexes Latest Daily YTD pct pct change change MSCI Emerging Markets 885.43 -0.4 11.94 MSCI LatAm 2,312.50 -0.79 27.39 Brazil Bovespa 57,371.63 -0.93 32.35 Mexico IPC 45,922.91 0.34 6.85 Chile IPSA 4,049.34 -0.43 10.03 Chile IGPA 20,159.25 -0.37 11.06 Argentina MerVal 15,713.46 -0.87 34.59 Colombia IGBC 10,031.84 -0.79 17.37 Venezuela IBC 11,925.21 -0.11 -18.25 Currencies Latest Daily YTD pct pct change change Brazil real 3.2910 0.29 19.93 Mexico peso 19.6585 -1.50 -12.35 Chile peso 676.5 -0.74 4.91 Colombia peso 2,950.39 -0.71 7.42 Peru sol 3.394 -0.29 0.59 Argentina peso (interbank) 15.0900 -0.13 -13.97 Argentina peso (parallel) 15.42 0.00 -7.46 (Reporting by Bruno Federowski, editing by G Crosse)
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