July 10, 2017 / 4:08 PM / a year ago

EMERGING MARKETS-Mexico peso extends gains on trade talk hopes

    By Bruno Federowski
    SAO PAULO, July 10 (Reuters) - The Mexican peso extended
gains on Monday as investors hoped that talks between Mexico and
the United States over the North America Free Trade Agreement
(NAFTA) could soon reach a favorable conclusion.
    After suffering for months on concerns that U.S. President
Donald Trump could scrap NAFTA, the Mexican peso has
since stabilized as he adopted a more constructive rhetoric. 
    Trump hailed progress on trade after meeting Mexican
President Enrique Pena Nieto on Friday on the sidelines of the
G20 summit in Hamburg, Germany. The Mexican government has said
it expects a general agreement on reworking the trade deal by
the end of 2017.
    The peso firmed 0.7 percent, touching its strongest since
late June. Also boosting the demand for the currency was a
central bank decision to renew $200 million worth of foreign
exchange hedging instruments.
    The Brazilian real also found support in central bank
intervention, after the bank indicated it could fully roll over
$6.2 billion worth of currency swaps maturing next month. 
    Brazil's benchmark Bovespa stock index rose 0.8
percent, as shares of miner Vale SA tracked iron ore
prices higher.
    Shares of Alpargatas SA, the maker of Havaianas
flip-flops, fell 1.6 percent after Reuters reported controlling
shareholder J&F Investimentos ended talks to sell a controlling
stake in the company.
    Power utility Light SA jumped to the highest
level in 16 years after shareholder Cia Energética de Minas
Gerais SA decided to fully dispose of its stake as
part of a divestment plan.    
    Key Latin American stock indexes and currencies at 1600 GMT:
 Stock indexes                                daily %    YTD %
                                               change   change
 MSCI Emerging Markets               1008.45      0.6    16.26
 MSCI LatAm                          2584.71     1.67     8.62
 Brazil Bovespa                     62807.70     0.78     4.28
 Mexico S&P/BVM IPC                 50508.00      0.9    10.66
 Chile IPSA                          4898.09     0.89    17.99
 Chile IGPA                         24482.71     0.81    18.08
 Argentina MerVal                   22093.52      0.3    30.59
 Colombia IGBC                      10920.79    -0.16     7.83
 Venezuela IBC                     123527.80     0.06   289.61
 Currencies                                   daily %    YTD %
                                               change   change
 Brazil real                          3.2625     0.50    -0.41
 Mexico peso                         17.9800     0.71    15.37
 Chile peso                           666.41     0.11     0.64
 Colombia peso                        3061.5     0.93    -1.96
 Peru sol                              3.255    -0.06     4.88
 Argentina peso (interbank)          16.9950    -0.09    -6.59
 Argentina peso (parallel)             17.17     0.17    -2.04

 (Reporting by Bruno Federowski; Editing by Jonathan Oatis)
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