EMERGING MARKETS-Brazil real firms on impeachment bets despite intervention
By Bruno Federowski SAO PAULO, April 14 (Reuters) - The Brazilian real edged stronger on Thursday to an eight-month high, shaking off the effects of central bank intervention amid growing bets President Dilma Rousseff could soon be impeached, paving the way to a more market-friendly government. The country's central bank once again intervened heavily to try to weaken the currency by stepping up its dollar purchases in domestic futures markets, using instruments known as reverse currency swaps. That intervention drove the real sharply weaker early in the session, but the currency clawed its way back to end the session stronger on growing expectations that the lower house of Congress would vote on Sunday to impeach the leftist president. The bank bought $8 billion in swaps on Tuesday, $5.25 billion on Wednesday and $4 billion on Thursday. Traders said those contracts were mostly acquired by companies seeking to exit bets on the real's weakness and unwind currency hedging. Traders expect Rousseff's ouster, if it materializes, could bring back trust in Latin America's biggest economy, currently mired in its deepest recession on record. Nearly all members of Brazil's largest political party in the lower house of Congress will back the impeachment campaign, a high-ranking party official said on Thursday. Hopes of political change lifted the benchmark Bovespa stock index to a ten-month high on Wednesday, but profit-taking weighed on the index on Thursday. Other Latin American currencies strengthened after tame U.S. price data reinforced expectations that the Federal Reserve will proceed cautiously in raising interest rates over the following months. Key Latin American stock indexes and currencies at 2030 GMT: Stock indexes daily % YTD % Latest change change MSCI Emerging Markets 845.45 0.15 6.46 MSCI LatAm 2219.21 0.02 21.28 Brazil Bovespa 52411.02 -1.39 20.90 Mexico IPC 45403.54 -0.02 5.64 Chile IPSA 3950.56 -0.17 7.35 Chile IGPA 19367.68 -0.14 6.70 Argentina MerVal 13212.49 -0.64 13.17 Colombia IGBC 10084.14 -0.33 17.98 Venezuela IBC 15659.55 0 7.34 Currencies daily % YTD % change change Latest Brazil real 3.4745 0.09 13.60 Mexico peso 17.4085 0.11 -1.03 Chile peso 663.8 0.96 6.91 Colombia peso 2993.2 0.47 5.88 Peru sol 3.273 -0.31 4.31 Argentina peso (interbank) 14.3100 0.63 -9.28 Argentina peso (parallel) 14.93 -0.07 -4.42 (Reporting by Bruno Federowski; Additional reporting by Paula Arend Laier; Editing by W Simon and Meredith Mazzilli)
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