January 5, 2017 / 4:02 PM / 2 years ago

EMERGING MARKETS-Mexico peso rebounds from record low as central bank acts

SAO PAULO, Jan 5 (Reuters) - The Mexican peso strengthened
on Thursday after the central bank sold dollars to support the
ailing currency, which has been battered by uncertainty over
U.S. President-elect Donald Trump.
    The peso firmed as much as 1.5 percent after
slumping to a record low on Wednesday.
    The currency posted its worst yearly performance since 2008
last year on concerns that Trump could enact protectionist
policies against Mexico.
    It extended losses in the first days of 2017 after carmaker
Ford Motor Co announced it would cancel a planned $1.6
billion investment in central Mexico following criticism by
    The Mexican central bank reacted by selling an unspecified
amount of dollars at home and in New York to prop up the
    Analysts with BNP Paribas praised the move, saying the bank
will need to adopt a more aggressive intervention policy than it
did in the last two years in order to correct currency
    In a client note, they estimated the Mexican central bank
currently has more than $40 billion on hand it could use to
buffer the peso's decline.
    Other Latin American currencies were also higher after a
softer-than-expected U.S. jobs report triggered worldwide
profit-taking on the U.S. dollar.
    U.S. private employers added 153,000 jobs in December, fewer
than the month before and below analyst expectations of 170,000,
according to the ADP National Employment Report. 
    The Chilean and Colombian pesos both
strengthened over 1 percent, also helped by rising prices of
oil, iron ore and other basic products.
    Brazil's benchmark Bovespa stock index rose,
supported by shares of miners, steelmakers and other
commodity-related firms.
    But the Brazilian real was only 0.4 percent higher as
traders refrained from pushing the currency past 3.20 to the
dollar for the first time since early November.
    Key Latin American stock indexes and currencies at 1550 GMT:
 Stock indexes                              daily %     YTD %
                                             change    change
 MSCI Emerging Markets              882.56     1.27      1.06
 MSCI LatAm                        2398.34     0.78      1.67
 Brazil Bovespa                   62075.12     0.79      3.07
 Mexico IPC                       46303.36    -0.61      1.45
 Chile IPSA                        4157.92    -0.25      0.16
 Chile IGPA                       20765.17    -0.21      0.15
 Argentina MerVal                 17924.94     -1.2      5.95
 Colombia IGBC                    10317.17     0.28      1.87
 Venezuela IBC                    32605.93     2.41      2.84
 Currencies                                 daily %     YTD %
                                             change    change
 Brazil real                        3.2050     0.40      1.38
 Mexico peso                       21.3385     0.52     -2.79
 Chile peso                          662.8     1.31      1.19
 Colombia peso                        2939     1.02      2.13
 Peru sol                             3.37     0.42      1.31
 Argentina peso (interbank)        15.9300     1.04     -0.35
 Argentina peso (parallel)           16.87     0.53     -0.30

 (Reporting by Bruno Federowski; Editing by Nick Zieminski)
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