January 11, 2017 / 1:03 AM / 2 years ago

EMERGING MARKETS-Mexican peso hits fresh lows ahead of Trump conference

SAO PAULO/MEXICO CITY, Jan 10 (Reuters) - Mexico's peso
crashed to historic lows on Tuesday, as concern grew over what
policies U.S. President-elect Donald Trump could enact against
Latin America's second-largest economy.     
    Trump has threatened to rip up a key free trade agreement
with Mexico and has attacked U.S. companies that have invested
there. Last week, Mexico's central bank intervened in the market
to cushion the peso's decline. 
    The peso extended losses on Tuesday to a new historic low as
traders avoided exposure to the currency ahead of a news
conference by Trump on Wednesday, his first since defeating
Democrat Hillary Clinton in a November vote. 
    The peso closed down almost 2 percent at 21.801 per dollar,
while the IPC stock index gained 0.73 percent.
    Jose Angel Gurria, secretary general for the Organization
for Economic Co-operation and Development, said on Tuesday that
he thought further depreciation was "almost inevitable".
    Brazilian stocks rose 0.7 percent as hopes that China would
further cut steel output lifted shares of miners and steelmakers
for a second day.
    The official Xinhua news agency reported on Sunday that
Hebei province, which accounts for about a quarter of China's
total steel output, plans to slash 31.86 million tonnes of steel
and ironmaking capacity this year. 
    Shares of iron ore miner Vale SA  were
the biggest gainers on Brazil's benchmark Bovespa stock index
    Brazil's currency was nearly flat as bets on higher
U.S. rates offset expectations of inflows related to a $4
billion bond issuance by state-controlled oil company Petróleo
Brasileiro SA.    

    Key Latin American stock indexes at 2125 GMT:    
 Stock indexes                              daily %    YTD %
                                             change   change
 MSCI Emerging Markets              885.70     0.83     2.72
 MSCI LatAm                        2393.84     0.48     2.27
 Brazil Bovespa                   62131.80      0.7     3.16
 Mexico IPC                       45886.27     0.73     0.53
 Chile IPSA                        4174.58     0.31     0.56
 Chile IGPA                       20832.11     0.28     0.47
 Argentina MerVal                 18783.32     1.47    11.03
 Colombia IGBC                    10258.29    -0.18     1.29
 Venezuela IBC                    32388.19    -0.21     2.15
 (Reporting by Bruno Federowski, Paulina Osorio Perez and
Alexandra Alper; Editing by Andrea Ricci)
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