November 12, 2016 / 1:32 AM / 2 years ago

EMERGING MARKETS-Mexico peso, Brazil real slump for third day on Trump concerns

(Updates with final prices)
    By Bruno Federowski
    SAO PAULO, Nov 11 (Reuters) - The Brazilian and Mexican
currencies weakened for a third day on Friday on concerns that
U.S. President-elect Donald Trump's policies could make the
Federal Reserve increase rates by more than expected and bring
about a global trade shock.
    The Mexican peso has become a lightning rod for market
anxiety after Trump's election victory due to fears about the
future of Mexican-U.S. trade relations. Trump has vowed to build
a border wall between Mexico and the United States, and
threatened to dump the North American Free Trade Agreement.
    The currency weakened nearly 4 percent overnight to
a fresh record low over 21 pesos per dollar, heading for its
worst weekly performance since 2008, and it reacted negatively
when Finance Minister Jose Antonio Meade announced no new
measures to stem the slide. 
    Risk aversion hammered other emerging markets as traders
feared higher U.S. interest rates could drain capital away from
high-yielding assets.
    The real fell as much as 3.9 percent to 3.49 reais,
before paring most of the losses before the close.
    Many investors believe inflation could spike if Trump
follows through with pledges of heavy infrastructure spending,
triggering a response by the Fed.
    But the infrastructure proposals also triggered expectations
of higher demand for industrial metals, with copper prices
heading for their best weekly gain since 1980.
    The Chilean peso, whose performance tends to
closely follow copper prices, weakened over 1.9 percent, less
than its main peers.

    Key Latin American stock indexes and currencies at 0000 GMT:
 Stock indexes                               daily %   YTD %
                                              change  change
 MSCI Emerging Markets               849.10    -3.03    6.92
 MSCI LatAm                         2205.99    -4.98   20.56
 Brazil Bovespa                    59183.51     -3.3   36.52
 Mexico IPC                        44978.25    -0.54    4.66
 Chile IPSA                         4150.39    -1.51   12.78
 Chile IGPA                        20792.95    -1.33   14.55
 Argentina MerVal                  15659.74    -3.51   34.13
 Colombia IGBC                      9627.74    -1.59   12.64
 Venezuela IBC                     24164.60    13.35   65.64
 Currencies                                  daily %   YTD %
                                              change  change
 Brazil real                         3.3946    -1.00   16.27
 Mexico peso                          20.86    -1.26  -17.40
 Chile peso                           669.1     -1.9    6.07
 Peru sol                             3.406    -0.18    0.23
 Argentina peso (interbank)         15.2500    -1.95  -14.87
 Argentina peso (parallel)            15.42    -0.78   -7.46

 (Reporting by Bruno Federowski; Editing by Meredith Mazzilli
and Lisa Shumaker)
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below