August 15, 2016 / 3:52 PM / 2 years ago

EMERGING MARKETS-Brazil real up as concerns over cenbank action fade; stocks rise

By Bruno Federowski
    SAO PAULO, Aug 15 (Reuters) - The Brazilian real
strengthened on Monday after an official told Reuters there was
not much the government could do to halt the currency's recent
    The real had posted its biggest daily loss in two months on
Friday after interim President Michel Temer said his government
would "look for an equilibrium" in the exchange rate.
    But a senior member of the economic team told Reuters that
the real should continue to strengthen, given high liquidity
abroad and less political uncertainty at home. 
    "Friday's reading, that the central bank could try to fight
off strength in the real, is rapidly fading," said José Carlos
Amado, a trader with Spinelli brokerage in São Paulo.
    The real has set one-year highs on optimism over Temer's
pledges of fiscal restraint, while expectations of low U.S.
interest rates sparked a worldwide rally in emerging market
    The Mexican peso  extended those gains on
Monday to a three-month high at 18 per U.S. dollar as crude oil 
prices rose on speculation of coordinated action to limit global
    Markets in Colombia, Argentina and Chile were closed due to
local holidays.
    Brazilian and Mexican equities also rose, supported by
higher oil prices.
    Shares of state-controlled Brazilian oil company Petróleo
Brasileiro SA  provided the biggest boost
to Brazil's benchmark Bovespa stock index, which rose to
its highest level since September 2014.
    Stocks in Braskem SA led the gains after Brazil's
largest petrochemical company named Everson Bassinello as its
new head of compliance.
    Braskem has sought to improve governance amid corruption
charges as part of a sweeping graft probe involving government
officials and executives at major companies.
    Key Latin American stock indexes and currencies at 1530 GMT:
 Stock indexes                               daily %   YTD %
                                              change  change
 MSCI Emerging Markets               916.91     0.75    14.6
 MSCI LatAm                         2526.77     0.95   36.78
 Brazil Bovespa                    58815.70     0.88   35.68
 Venezuela IBC                     12435.81     0.29  -14.75
 Currencies                                  daily %   YTD %
                                              change  change
 Brazil real                         3.1639     0.62   24.75
 Mexico peso                        18.0140     1.41   -4.35
 Peru sol                              3.31     0.12    3.14

 (Reporting by Bruno Federowski; Additional reporting by Paula
Arend Laier; Editing by Lisa Von Ahn)
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