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Mercados

EMERGING MARKETS-Mexican peso gains on oil boost; Brazil's real hit by second-wave fears

    * Mexico's peso set for third straight week of gains
    * Brazil's real leads losses for the day
    * MSCI Latam stock index down 1.1%

 (Adds details, updates prices)
    By Shriya Ramakrishnan and Ambar Warrick
    Nov 20 (Reuters) - The Mexican and Colombian pesos led gains
across Latin American currencies on Friday thanks to higher
crude prices, while Brazil's real was the biggest faller on
fears of a second wave of coronavirus infections.
    Most regional currencies were set for weekly gains as
investors viewed progress towards a COVID-19 vaccine as a net
positive for sentiment.
    Mexico's currency, which rose about 0.5% to the
dollar, was also set to outpace its regional peers for the week,
as the prospects for effective COVID-19 vaccines and hopes that
OPEC and its allies will keep production in check lent support
to oil prices.
    The currency recently benefited from the Mexican central
bank pausing its rate-cutting cycle.
    "MXN is a carry story pure and simple. When adjusting for
both volatility and liquidity it is still the world's number one
carry currency," said Christian Lawrence, senior market
Strategist at Rabobank. 
    "Any periods of rising demand for risk will see support for
MXN. Domestic fundamentals don't matter at the moment." 
    Colombia's peso rose 0.5%, while Brazil's real
led losses for the day, shedding 1.3% against the dollar as
fears of a second wave of infections in Latin America's largest
economy grew.
    But the currency was set to gain for the week after the
government raised its growth forecast for the year and pledged
to fast track reforms to privatisation and fiscal spending. 
    Brazil's government also trimmed its year-end budget deficit
forecast thanks to an anticipated reduction in mandatory
spending and an increase in revenues.
    Peru's sol fell 0.5%, but was set to end a volatile
week slightly higher as political tensions in the country cooled
after the appointment of interim President Francisco Sagasti. 
    A gauge of Latin American stocks fell 1.1%
during the day, but was still set to end the week higher.    
    Chile's peso fell 0.5% even as prices of its main
export, copper, surged to their highest in 29 months on Friday.

    Argentina's central bank on Thursday said companies that
participate in the country's natural gas production plan will
have free access to the official foreign exchange
market.
    The move opens a potential loophole in strict capital
controls which have been in place since August last year, aimed
at protecting foreign exchange reserves, after the collapse of
the peso currency. 
    
    Key Latin American stock indexes and currencies:
    
                              Latest    Daily % change
 MSCI Emerging Markets         1208.74             0.69
                                        
 MSCI LatAm                    2159.51            -1.09
                                        
 Brazil Bovespa              105999.53            -0.63
                                        
 Mexico IPC                   41884.48             0.04
                                        
 Chile IPSA                    4054.32             0.65
                                        
 Argentina MerVal             51156.96            0.406
                                        
 Colombia COLCAP               1230.70            -0.01 Currencies             Latest    Daily % change
 Brazil real                    5.3791            -1.25
                                        
 Mexico peso                   20.0770             0.51
                                        
 Chile peso                      762.9            -0.52
                                        
 Colombia peso                 3630.95             0.47
 Peru sol                       3.5947            -0.53
                                        
 Argentina peso                80.3500            -0.09
 (interbank)                            
                                        
 
    

 (Reporting by Shriya Ramakrishnan in Bengaluru; Editing by
Kirsten Donovan)
  

Nuestros Estándares: Los principios Thomson Reuters.

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