August 7, 2017 / 5:19 PM / 10 months ago

EMERGING MARKETS-Mexico peso slips to nearly 1-month low on NAFTA jitters

    By Miguel Gutierrez
    MEXICO CITY, Aug 7(Reuters) - Mexico's peso slipped
to a nearly one-month low against the dollar on Monday as the
impending start of talks to renegotiate the North American Free
Trade Agreement gave the market a renewed bout of jitters.
    The peso sank to a record low in January on fears that U.S.
President Donald Trump would rip up NAFTA, but it has rallied as
his administration has taken a more conciliatory tone and moved
to renegotiate the 23-year-old accord.
    However, market participants are again taking a more
cautious tone as Canada, Mexico and the United States are due to
start talks in Washington on Aug. 16 to revamp NAFTA, which
underpins some $1 trillion in annual trilateral trade.
    The peso fell as much as 0.47 percent on Monday to 17.9910
to the dollar, its weakest intraday level since July 11.
    "Over the next two weeks, the main risk for the peso will be
the comments related to the NAFTA renegotiation," said Banco
BASE analyst Gabriela Siller. "If the initial talks between
Mexico and the United States seem cooperative, the peso could
gain ground towards the end of the month."
    In Brazil, the benchmark Bovespa stock index rose
1.03 percent, breaking above 67,500 points, as mining and steel
shares gained.
    Still, market observers remained vigilant about ongoing
investigations targeting Brazilian President Michel Temer, who
is trying to push through overhauls of the nation's pension and
tax laws to close a gaping budget deficit and get an economic
recovery back on track.    
    Key Latin American stock indexes and currencies at 1636 GMT:
 Stock indexes                                daily %     YTD %
                                               change    change
 MSCI Emerging Markets               1074.36     0.67     23.77
 MSCI LatAm                          2792.59     0.51     18.71
 Brazil Bovespa                     67647.72     1.12     12.32
 Mexico S&P/BVM IPC                 51411.20     0.16     12.64
 Chile IPSA                          5107.97     0.03     23.04
 Chile IGPA                         25480.89        0     22.89
 Argentina MerVal                   21722.67     0.09     28.40
 Venezuela IBC                     195693.89     10.9    517.23
 Currencies                                   daily %     YTD %
                                               change    change
 Brazil real                          3.1257    -0.03      3.95
 Mexico peso                         17.9510    -0.25     15.56
 Chile peso                            650.4     0.03      3.12
 Peru sol                              3.243     0.06      5.27
 Argentina peso (interbank)          17.7250    -0.28    -10.44
 Argentina peso (parallel)             18.18    -0.17     -7.48
 (Reporting by Miguel Gutierrez; Writing by Anthony Esposito;
Editing by Lisa Von Ahn)
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