August 1, 2018 / 3:50 PM / 4 months ago

EMERGING MARKETS-LatAm markets range-bound ahead of U.S. Fed rate decision

    By Bruno Federowski
    BRASILIA, Aug 1 (Reuters) - Latin American markets were
range-bound on Wednesday as traders took a cautious stance ahead
of the U.S. Federal Reserve's interest rate decision later in
the day.
    The Fed is widely expected to hold rates flat after raising
them seven times since December 2015. Traders will parse the
Fed's policy statement, scheduled for 1800 GMT, for clues over
how many hikes are yet to come this year.
    Economists say solid economic growth and rising inflation
are likely to warrant an additional two increases in 2018, even
as U.S. President Donald Trump has ramped up criticism of the
Fed's tightening.
    "In a way, the market is growing less sensitive to Trump's
remarks," H.Commcor brokerage trader Cleber Alessie said.
    Higher rates could curb demand for emerging-market assets,
which offer higher yields.
    Currencies from Brazil, Mexico and Colombia
 firmed between 0.1 and 0.3 percent. The Chilean peso
 underperformed, falling 0.6 percent as copper prices
slumped due to concerns over escalating trade tensions.
    A source familiar with the matter said Washington plans to
impose a 25 percent tariff on $200 billion of imported Chinese
goods after initially setting them at 10 percent, escalating the
dispute between the world's two biggest economies.
    Declining prices of basic materials weighed on shares of
miners, such as Brazil's Vale SA.
    Yet shares of lender Itaú Unibanco Holding SA
rebounded from the previous day's losses, pulling up stocks in
other banks and helping to keep the benchmark Bovespa stock
index nearly flat.
    
    
    Latin American stock indexes and currencies at 1525 GMT:
    
 Stock indexes                               daily %    YTD %
                                              change   change
                                  Latest              
 MSCI Emerging Markets              1087.26    -0.02    -6.13
 MSCI LatAm                         2708.51     0.23    -4.45
 Brazil Bovespa                    79243.00     0.03     3.72
 Mexico IPC                        49717.75     0.04     0.74
 Chile IPSA                         5433.62    -0.02    -2.35
 Chile IGPA                        27334.42    -0.09    -2.31
 Argentina MerVal                  29396.89     0.37    -2.22
 Colombia IGBC                     12140.72     0.03     6.77
                                                             
 Currencies                                  daily %    YTD %
                                              change   change
                                     Latest           
 Brazil real                         3.7452     0.20   -11.53
 Mexico peso                        18.5950     0.28     5.94
                                                      
 Chile peso                          640.35    -0.55    -4.01
 Colombia peso                      2885.26     0.10     3.35
 Peru sol                             3.272     0.00    -1.07
 Argentina peso (interbank)         27.6700    -0.90   -32.78
                                                      
 Argentina peso (parallel)            28.35    -0.35   -32.17
                                                      
 

 (Reporting by Bruno Federowski; editing by Grant McCool)
  
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