August 30, 2016 / 2:57 PM / 2 years ago

EMERGING MARKETS-Latam currencies weaken on Fed official's comments, U.S. data

By Bruno Federowski
    SAO PAULO, Aug 30 (Reuters) - Latin American currencies
weakened on Tuesday as comments by a high-ranking Federal
Reserve policymaker and strong U.S. economic data kept investors
guessing about the possibility of a September rate hike.
    Fed Vice Chair Stanley Fischer told Bloomberg TV that the
U.S. job market is nearing full strength and the pace of rate
increases will depend on the economy's health. 
    But he refrained from commenting on the timing of the next
Fed rate hike, saying that will depend on the incoming economic
    Data on Tuesday showed U.S. consumer sentiment rose to 101.1
in August, handily beating expectations for a reading of 97.0.
    Fischer had said on Friday that Fed Chair Janet Yellen's
speech at the global central bankers conference in Jackson Hole,
Wyoming, was "consistent" with the possibility of a September
hike, catapulting the dollar's value. 
    Markets are now focused on the U.S. employment report for
August, which is scheduled to be released later this week.
    "Investors continue to focus on Friday's U.S. nonfarm
payroll data for guidance on the timing of the next Fed rate
increase," Scotiabank analysts wrote in a client note.
    A decline in oil prices also weighed on the currencies of
crude exporters, such as the Mexican and Colombian
    Stock markets were mixed in thin trading, with activity in
Brazilian markets especially subdued as traders monitored the
Senate impeachment trial of suspended President Dilma Rousseff.
    The 81 senators will make final statements on Tuesday and
vote for a verdict on Wednesday morning, said Supreme Court
Chief Justice Ricardo Lewandowski, who is presiding over the
    Brazil's benchmark Bovespa stock index slipped 0.4
percent. Education company Estácio Participações SA 
was the biggest loser, with its shares falling after its chief
executive officer quit, citing personal and family issues.
    Kroton also is currently in the process of being acquired by
its bigger rival Kroton SA, whose shares fell 1.5
    Key Latin American stock indexes and currencies at 1440 GMT:
 Stock indexes                               daily %   YTD %
                                              change  change
 MSCI Emerging Markets               898.95     0.33   12.82
 MSCI LatAm                         2413.31    -0.71   32.83
 Brazil Bovespa                    58463.36    -0.25   34.86
 Mexico IPC                        47631.92     0.07   10.83
 Chile IPSA                         4161.44     0.15   13.08
 Chile IGPA                        20628.68     0.19   13.65
 Argentina MerVal                  16111.82     0.48   38.00
 Colombia IGBC                     10121.57     0.24   18.42
 Venezuela IBC                     11936.38     0.16  -18.18
 Currencies                                  daily %   YTD %
                                              change  change
 Brazil real                         3.2595    -0.86   21.09
 Mexico peso                        18.7830    -0.84   -8.27
 Chile peso                           674.4    -0.54    5.23
 Colombia peso                       2928.8    -0.36    8.21
 Peru sol                             3.377     0.00    1.10
 Argentina peso (interbank)         15.1300    -0.17  -14.19
 Argentina peso (parallel)            15.46     0.19   -7.70

 (Reporting by Bruno Federowski; Editing by Paul Simao)
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