June 8, 2017 / 9:55 PM / a year ago

EMERGING MARKETS-Mexico peso firms to highest since Trump win, Brazil real firms

 (Recasts with rise in Mexican peso; adds details on Mexico,
Brazil currency gains)
    June 8 (Reuters) - Mexico's peso on Thursday hit its
strongest level since the election of Donald Trump as U.S.
president, while Brazil's currency firmed on bets a trial will
not oust President Michel Temer.
    The peso gained after data showed a jump in inflation to an
eight-year high, backing expectations of more central bank
interest rate hikes. Higher interest rates lift the appeal of
the peso to foreign investors.    
    The peso advanced as far as 18.1625 per dollar, its
strongest level since Nov. 9, when Trump's surprise victory
drove the currency to a record low on fears he would rip up a
trade deal with Mexico.
    But the peso bounced back and has been the best-performing
major currency this year, up around 14 percent against the
dollar as the Trump administration moved toward more
constructive talks to renegotiate the North American Free Trade
    If the peso firms past 18.16, it would be trading at its
strongest level since last August.
    Meanwhile, Brazil's real firmed after the majority of
judges on the country's top electoral court agreed to exclude
testimony by executives from conglomerate Odebrecht SA.

    The ruling potentially strengthens Temer's assertions that
his campaign received no illegal funding when he ran as former
leftist President Dilma Rousseff's running mate in 2014.

    The court is expected to rule by Friday on whether to annul
the election and unseat Temer.
    A favorable verdict would back bets that Temer may be able
to cut pension spending and reform labor laws, seen as critical
to curb growth of public debt and shore up investor trust.

    Key Latin American stock indexes and currencies at 2100 GMT:
 Stock indexes                Latest       Daily     YTD
                                             pct     pct
                                          change  change
 MSCI Emerging Markets          1,019.06    0.33   18.18
 MSCI LatAm                     2,543.70   -0.85    8.67
 Brazil Bovespa                62,755.57   -0.66    4.20
 Mexico IPC                    49,087.46   -0.38    7.55
 Chile IPSA                     4,859.67   -0.63   17.06
 Chile IGPA                    24,363.06   -0.59   17.50
 Argentina MerVal              21,928.76    -1.3   29.62
 Colombia IGBC                 10,749.39   -0.08    6.13
 Venezuela IBC                 92,326.76   10.74  191.20
 Currencies                       Latest   Daily     YTD
                                             pct     pct
                                          change  change
 Brazil real                      3.2637    0.27   -0.44
 Mexico peso                       18.19    0.17   14.04
 Chile peso                        664.9    0.62    0.87
 Colombia peso                  2,918.75   -0.23    2.84
 Peru sol                          3.269    0.03    4.44
 Argentina peso (interbank)      15.9050    0.60   -0.19
 Argentina peso (parallel)         16.29    0.43    3.25

 (Reporting by Michael O'Boyle in Mexico City and Bruno
Federowski in Sao Paulo; Editing by Leslie Adler)
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