June 1, 2016 / 8:27 PM / 2 years ago

EMERGING MARKETS-Mexico peso tumbles to 3-month low as oil falls

(New throughout, updates prices and market activity)
    By Bruno Federowski
    SAO PAULO, June 1 (Reuters) - The Mexican peso fell to a
three-month low against the dollar on Wednesday, as weak
commodity prices and disappointing factory data from China
pressured the currency toward levels that earlier this year
triggered central bank intervention.
    The peso  fell as low as 18.6225 per U.S.
dollar, the weakest since Feb. 17, when the central bank sold
dollars directly to banks and unexpectedly raised its benchmark
interest rate to fight off currency speculators. 
    Prices of crude, a key export and source of revenue
for Mexico, fell below $49 per barrel on skepticism that major
producers could agree to curb output.
    Prices of oil later recovered to trade closer to $50 a
barrel after OPEC sources told Reuters the group was likely to
consider a new output ceiling at a meeting on Thursday.
    Early in the day, equity markets around the world fell after
data showed China's factory activity shrank for a 15th straight
month in May as new orders fell, raising worries about global
    Oil-rich Colombia's peso weakened more than its peers
for a second day, after the central bank said on Friday it would
suspend dollar option sales aimed at cushioning the currency's
    The Brazilian real seesawed as traders remained
skeptical of the country's economic outlook even after a
smaller-than-expected economic contraction in the first quarter.
    Analysts pointed out the figures were boosted by an increase
in government spending, which should fade over the following
    "With fiscal policy set to tighten over the second half of
the year, this prop to the economy will go," Capital Economics
analyst Neil Shearing wrote in a report.
    Interim President Michel Temer's government will seek
constitutional change to curb increases in public spending.
 Brazil's benchmark Bovespa stock index rose
nearly 1 percent and outperformed its peers in the region,
supported by a rebound in shares of Banco Bradesco SA
    A day earlier, Banco Bradesco stock fell 5 percent after
federal police accused Chief Executive Officer Luiz Carlos
Trabuco and two senior executives of plotting to avoid a 3
billion-reais ($832 million) tax fine. 
    Key Latin American stock indexes and currencies at 1958 GMT:
 Stock indexes                              daily %      YTD %
                               Latest        change     change
 MSCI Emerging Markets            807.62       0.02       1.68
 MSCI LatAm                      2050.98       0.63      11.39
 Brazil Bovespa                 48943.93       0.97      12.90
 Mexico IPC                     45556.93       0.21       6.00
 Chile IPSA                      3936.34       0.04       6.96
 Chile IGPA                     19397.76       -0.1       6.87
 Argentina MerVal               12632.63      -0.38       8.20
 Colombia IGBC                   9652.58        0.6      12.93
 Venezuela IBC                  15555.12       0.35       6.63
 Currencies                                 daily %      YTD %
                                             change     change
 Brazil real                      3.5867       0.69       9.13
 Mexico peso                     18.4840      -0.10      -7.28
 Chile peso                       690.64       0.21       2.69
 Colombia peso                      3112      -0.72       1.81
 Peru sol                          3.365       0.33       1.44
 Argentina peso (interbank)      13.9500       0.29      -7.45
 Argentina peso (parallel)         14.38       0.90      -0.77
 (Additional reporting by Paula Arend Laier and Anna Yukhananov
in Mexico City; Editing by Chris Reese and David Gregorio)
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