June 26, 2017 / 2:48 PM / a year ago

EMERGING MARKETS-Brazil, Mexico currencies up after weak U.S. manufacturing data

    SAO PAULO, June 26 (Reuters) - Brazilian and Mexican
currencies strengthened on Monday after weaker-than-expected
U.S. manufacturing data bolstered bets that the U.S. Federal
Reserve will increase interest rates by less than planned in
coming months.
    New orders for key U.S.-made capital goods unexpectedly fell
in May and shipments declined, suggesting a loss of momentum in
the manufacturing sector halfway through the second quarter.

    The reports added to a recent batch of mixed economic
figures that have left investors skeptical about the Fed's
stated plan of raising U.S. rates once more before the end of
2017 and another three times next year. A slower pace of hikes
could support demand for high-yielding emerging market assets.
    Traders will look for further clues on the U.S. central
bank's outlook on Tuesday, when Fed Chair Janet Yellen is
scheduled to deliver a widely anticipated speech in Europe.
    The Brazilian real strengthened 0.9 percent, while
the Mexican peso touched its strongest level since May
2016. Colombian markets were closed for a local holiday.
    Brazil's benchmark Bovespa stock index rose 1.3
percent, the biggest gainer among markets in the region. Shares
of steelmakers, such as Cia Siderúrgica Nacional SA
and Usinas Siderúrgicas de Minas Gerais SA, led the
upswing, tracking rising prices of steel and iron ore.
    Alpargatas SA, which is not part of the benchmark
index, rose 4.3 percent to a nearly two-month high after its
controlling shareholder J&F Investimentos SA signed a
nondisclosure agreement with Cambuhy Investimentos Ltda to
potentially sell all of its shares.
    Alpargatas is among the J&F assets put up for sale as the
holding company seeks funds to pay for a 10.3 billion real 
($3.11 billion) fine with Brazilian prosecutors. J&F's fine, the
world's biggest to date, was imposed after members of the
Batista family admitted to bribing scores of politicians.
    Key Latin American stock indexes and currencies at 1415 GMT:
 Stock indexes                                daily %   YTD %
                                               change  change
 MSCI Emerging Markets               1020.37     0.86   17.33
 MSCI LatAm                          2524.56     1.26    6.52
 Brazil Bovespa                     61839.67     1.23    2.68
 Mexico S&P/BVM IPC                 49079.27      0.2    7.53
 Chile IPSA                          4766.20     0.19   14.81
 Chile IGPA                         23878.79     0.17   15.17
 Venezuela IBC                     121115.79     0.46  282.01
 Currencies                                   daily %   YTD %
                                               change  change
 Brazil real                          3.3101     0.86   -1.84
 Mexico peso                         17.8575     0.85   16.16
 Peru sol                              3.252     0.09    4.98
 Argentina peso (interbank)          16.1800     0.00   -1.89
 Argentina peso (parallel)             16.51     0.12    1.88

($1 = 3.3137 reais)

 (Reporting by Bruno Federowski; Editing by Jeffrey Benkoe)
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