April 28, 2016 / 8:58 PM / 2 years ago

EMERGING MARKETS-Colombian peso leads Latam FX gains on dovish Fed

(Recasts with Colombian peso gains, updates prices)
    BRASILIA, April 28 (Reuters) - Colombia's peso surged to
nearly a six-month high on Thursday  as Latin American
currencies gained after weak U.S. GDP numbers added to
expectations that the Federal Reserve will not quickly raise
interest rates.  
    The Colombian peso was the best performer, up 2
percent, helped by an increase in the price of oil, a major
export for the country.
    The Brazilian real and Mexican peso also gained,
with the real rising 0.7 percent and the peso 0.3 percent. 
    Disappointing earnings limited gains in Brazilian stocks
though. The Bovespa index slipped 0.3 percent as banks
and consumer-related companies missed profit expectations in the
midst of a deep recession.
    The Mexican stock index was down 0.9 percent.
    Shares of Carlos Slim's America Movil tumbled 11.2
percent in its biggest one-day percentage drop in eight years, 
after it reported on Wednesday that profit plunged more than 40
percent in the first quarter. 
    The Fed kept interest rates at 0.25 percent on Wednesday and
it acknowledged that economic growth has slowed. That was
confirmed on Thursday by data showing the U.S. economy grew at a
0.5 percent annual rate in the first quarter. Investors read the
Fed's message as a signal that the bank might refrain from
raising rates twice this year.  
    The dollar fell against most currencies in Latin America and
other emerging markets. 
    "The Fed's dovish tone weakens the dollar," Octavio de
Barros, chief economist at Brazilian bank Bradesco, said in a
research note. He forecast the next U.S. rate increase would
come in the second half of 2016.
    Key Latin American stock indexes and currencies at 2020 GMT:
 Stock indexes                              daily %    YTD %
                                             change   change
 MSCI Emerging Markets              844.06     0.11     6.29
 MSCI LatAm                        2283.91     0.88    24.82
 Brazil Bovespa                   54311.97     -0.3    25.29
 Mexico IPC                       45528.93     -0.9     5.94
 Chile IPSA                        4022.59     1.08     9.30
 Chile IGPA                       19737.13     0.92     8.74
 Argentina MerVal                 13714.69    -0.19    17.47
 Colombia IGBC                    10083.03    -0.04    17.97
 Venezuela IBC                    15654.76    -0.32     7.31
 Currencies                                 daily %    YTD %
                                             change   change
 Brazil real                        3.4959     0.74    12.90
 Mexico peso                       17.2640     0.32    -0.20
 Chile peso                          660.5     0.94     7.45
 Colombia peso                     2874.02     2.03    10.27
 Peru sol                            3.276     0.28     4.21
 Argentina peso (interbank)        14.3000    -0.73    -9.21
 Argentina peso (parallel)           14.66     0.55    -2.66
 (Reporting by Silvio Cascione; Additional reporting by Michael
O'Boyle in Mexico City; Editing by Lisa Von Ahn and Steve
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