EMERGING MARKETS-Mexico peso rises after U.S. presidential debate
By Bruno Federowski SAO PAULO, Sept 27 (Reuters) - The Mexican peso strengthened on Tuesday as traders cheered Democrat candidate Hillary Clinton's performance against Republican Donald Trump in the first presidential debate. Many traders fear a Trump victory could threaten Mexican exports to the United States, its biggest single market. The peso firmed 2.2 percent to its strongest in a week on Tuesday rebounding from its weakest-ever drop last week as polls showed growing support for a Trump presidency. Clinton put Trump on the defensive on Tuesday night by accusing him of being racist, sexist and a tax dodger. But analysts say Mexican markets should remain volatile until the Nov. 8 elections as the outcome remains far from certain. That has boosted a debate over whether the Mexican central bank could increase rates to support the peso over the coming months. Nomura Securities analysts believe it would be too early for a hike in next week's policy meeting, while the bank's gathering in Nov. 17 could prove to be too late. They recommended investors keep up bets in the peso's weakness, possibly protecting themselves against volatility with FX options. "We think the prevailing bias in the market (USDMXN upwards) will persist until we get a definitive result on election night or polls suggest an outcome with a high degree of confidence, an event that we see as unlikely for the time being," they wrote in a report. Rates paid on Mexican interest futures were down across the board. Brazilian rate futures <0#2DIJ:> also dropped after the country's central bank reduce its inflation forecasts, fostering bets on a rate cut as soon as October. Latin American stock markets, however, were mixed as a drop in crude prices weighed on shares of oil companies such as Brazil's Petróleo Brasileiro SA . Shares in Brazilian financial exchange BM&FBovespa SA also fell after the country's antitrust regulator opened up a probe into whether the bourse engaged in anticompetitive behavior. Key Latin American stock indexes and currencies at 1615 GMT: Stock indexes daily % YTD % change change Latest MSCI Emerging Markets 910.35 0.54 14.02 MSCI LatAm 2373.56 0.3 29.33 Brazil Bovespa 57765.44 -0.5 33.25 Mexico IPC 47491.04 0.5 10.50 Chile IPSA 4047.60 -1.02 9.98 Chile IGPA 20178.79 -0.85 11.17 Argentina MerVal 16133.96 -1.36 38.19 Colombia IGBC 9757.95 -1.26 14.16 Venezuela IBC 12838.19 1.39 -12.00 Currencies daily % YTD % change change Latest Brazil real 3.2368 0.31 21.94 Mexico peso 19.4590 2.21 -11.45 Chile peso 662.2 -0.09 7.17 Colombia peso 2906.39 0.50 9.05 Peru sol 3.366 0.03 1.43 Argentina peso (interbank) 15.2625 -0.15 -14.94 Argentina peso (parallel) 15.8 0.00 -9.68 (Reporting by Bruno Federowski; Editing by Diane Craft)
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