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Mercados

EMERGING MARKETS-Latam FX gains, Mexican peso up on optimism about investment drive

    * Most Latam currencies regain footing as dollar declines 
    * Mexico's investment plan viewed as positive by analysts 
    * Chilean peso strengthens after trade balance data
    * Oil exporter Colombia's peso hit by falling crude prices

    By Shreyashi Sanyal
    Oct 7 (Reuters) - Latin American currencies bounced on
Wednesday, with Mexico's peso leading gains as the country's
newly announced investment push was viewed as positive for its
ailing economy.  
    The peso jumped 1.5% against the dollar, as investors
were optimistic after the government presented an infrastructure
investment plan worth almost $14 billion (297 billion pesos) on
Monday. The package, which is mostly privately financed, is the
first concrete sign of a renewed readiness by corporate bosses
to invest under President Andres Manuel Lopez Obrador.

    "After the government had so far seemed rather tight-fisted,
referring to the difficult public finances, it is now going to
support the economic recovery with the implementation of
infrastructure projects," said Elisabeth Andreae, FX and
emerging markets analyst at Commerzbank. 
    "As far as the choice of the projects is concerned, 
government and the president seem intent on preventing a
repetition of past mistakes and to regain lost investor
confidence."
    Mexico's currency has fared better than those of regional
peers in recent months, in part due to the strong economic
connection with the United States, its main trading partner, but
the peso remains exposed to volatility leading up to the Nov. 3
U.S. elections.
    In Brazil, central bank president Roberto Campos Neto said
economic recovery is only partial, with sectors most affected by
social distancing still "depressed," and also repeated
policymakers' intention not to reduce monetary stimulus. The
real fell after rising earlier in the session.

    Market participants waited for the government to reveal
later in the day how it plans to fund its new social welfare
program Renda Cidada, with focus on how the proposal will
respect the administration's key fiscal spending cap rule. 
    Chile's peso rose 0.5% after central bank data 
showed a trade balance of $886 million in September, boosted by
an 8.3% surge in the value of copper exports.
    Copper prices rose on Wednesday on expectations of improving
economic growth and stronger demand for industrial metals.
 
    Stocks on Wall Street traded higher, even as President
Donald Trump broke off negotiations with Democrats on more
economic aid on Tuesday.
    Trump's abrupt call to end stimulus talks also hit oil
prices, along with a larger than expected rise in U.S. crude
inventories. Crude exporter Colombia's currency fell
against the dollar. 
    Later in the day, Peru's central bank will announce its
decision on interest rates, with analysts expecting rates to be
held steady. 
    
    Key Latin American stock indexes and currencies at 1411 GMT:
    
          Stock indexes                  Latest   Daily %
                                                  change
 MSCI Emerging Markets                   1107.87     0.49
 MSCI LatAm                              1846.87    -1.66
 Brazil Bovespa                         95908.67     0.31
 Mexico IPC                             37323.82     1.02
 Chile IPSA                              3612.85    -0.24
 Argentina MerVal                           0.00        0
 Colombia COLCAP                         1167.17    -0.15
                                                         
             Currencies                  Latest   Daily %
                                                  change
 Brazil real                              5.6295    -0.58
 Mexico peso                             21.4970     1.04
 Chile peso                                794.5     0.47
 Colombia peso                            3845.3    -0.37
 Peru sol                                 3.5878    -0.14
 Argentina peso (interbank)              77.0800     0.00
                                                  
 Argentina peso (parallel)                   148     1.35
                                                  
 

 (Reporting by Shreyashi Sanyal in Bengaluru)
  

Nuestros Estándares: Los principios Thomson Reuters.

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