June 30, 2016 / 4:41 PM / 2 years ago

EMERGING MARKETS-Brazil real gains as traders test new central bank chief

By Bruno Federowski
    SAO PAULO, June 30 (Reuters) - The Brazilian real
strengthened sharply for a third straight day on Thursday as
traders tested the new central bank chief's willingness to allow
the rally to continue.
    The real has gained about 6 percent since Monday's
close as a rebound in global risk appetite drove the currency
past 3.20 per U.S. dollar for the first time in almost a year.
    The move fostered speculation that the central bank could
intervene in currency markets aiming to protect Brazilian
exports, a rare bright spot in the country's deep recession.
    The newly-appointed central bank chief Ilan Goldfajn, who
took office this month, has repeatedly stressed that the bank
would use currency measures with "parsimony" if needed.
    "The real's rally caught a lot of people by surprise and
many want to see how far it will go," said Glauber Romano, a
trader at the Intercam brokerage.
    The currency outperformed its regional peers, which inched
up after Bank of England Governor Mark Carney said the central
bank may provide more stimulus following Britain's vote to exit
the European Union. 
    Mexico's peso  was nearly flat ahead of a
central bank policy meeting. The bank is expected to raise its
key lending rate in a bid to support the peso, amid concerns
about the inflationary impact of a weaker currency. 
    Recovering global investor sentiment also lifted most Latin
American stock indexes, with Brazil's and Mexico's
 bourses rising for a third straight day.
    Shares of Brazil's Eneva SA, which are not part
of the country's benchmark index, shot up 35 percent following
the end of the power producer's in-court debt restructuring.
    Key Latin American stock indexes and currencies at 1610 GMT:
 Stock indexes                               daily %    YTD %
                                              change   change
 MSCI Emerging Markets               832.58     1.31     3.49
 MSCI LatAm                         2261.12     1.25    22.04
 Brazil Bovespa                    51356.78      0.7    18.47
 Mexico IPC                        45836.28     0.81     6.65
 Chile IPSA                         3984.26     0.14     8.26
 Chile IGPA                        19667.90     0.11     8.35
 Argentina MerVal                  14629.89     0.14    25.31
 Colombia IGBC                      9726.97    -0.32    13.80
 Venezuela IBC                     12702.00    -1.02   -12.93
 Currencies                                  daily %    YTD %
                                              change   change
 Brazil real                         3.2054     0.97    23.14
 Mexico peso                        18.4890    -0.05    -6.81
 Chile peso                             658     0.58     7.86
 Colombia peso                      2921.89    -0.22     8.47
 Peru sol                            3.2869     0.46     3.87
 Argentina peso (interbank)         14.9350     0.30   -13.07
 Argentina peso (parallel)            14.86     0.40    -3.97

 (Reporting by Bruno Federowski; Editing by Brad Haynes and
Diane Craft)
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