May 27, 2016 / 3:02 PM / 2 years ago

EMERGING MARKETS-Latam currencies slip ahead of Yellen speech

By Bruno Federowski
    SAO PAULO, May 27 (Reuters) - Most Latin American currencies
slipped on Friday as traders awaited possible hints about the
timing of a U.S. interest rate increase from Federal Reserve
Chair Janet Yellen.
    She is due to speak at an event hosted by Harvard University
at 17:15 GMT (1:15 p.m. ET).
    Several Fed policymakers have stressed recently that market
expectations for the pace of rate hikes this year could be too
    "Yellen may corroborate the hawkish tone adopted by Fed
policymakers over the last few weeks," Guide Investimentos
brokerage analysts wrote in a client note. "The next rate hike
might be closer than many expect."
    U.S. rate futures currently indicate a 25 percent chance of
an increase in June and 45 percent in July, while some officials
have suggested a total of two or three hikes could be
appropriate this year.
    That could attract funds currently invested in high-yielding
emerging market assets, resulting in a stronger U.S. dollar.
    The Brazilian real underperformed its peers on
traders' concerns that interim President Michel Temer's
government could struggle to gather support for fiscal austerity
measures in Congress.
    High-ranking politicians from the ruling PMDB party have
been hit by the release of excerpts from taped conversations
suggesting they took action to obstruct a sweeping corruption
    Trading volumes were thin in Brazilian markets as many
traders were away a day after the Corpus Christi local holiday.
    The country's benchmark Bovespa stock index inched
up, supported by a rise in shares of brewer Ambev SA.
Stocks of state-controlled oil company Petróleo Brasileiro SA
 retreated, tracking a decline in crude oil prices.
    Shares of steelmaker Usinas Siderúrgicas de Minas Gerais SA
 fell 2.3 percent. Japan's Nippon Steel & Sumitomo
Metal said on Thursday it will take legal action to
void the naming of a new chief executive by its Brazilian
affiliate Usiminas, as the company is known.
    Key Latin American stock indexes and currencies at 1445 GMT:
 Stock indexes                                 daily    YTD %
                                                   %   change
                                   Latest     change  
 MSCI Emerging Markets                808.09    0.64     1.11
 MSCI LatAm                          2066.98   -0.44    13.46
 Brazil Bovespa                     49586.14    0.21    14.39
 Mexico IPC                         46089.33    0.11     7.24
 Chile IPSA                          3954.46    0.05     7.45
 Chile IGPA                         19514.50    0.04     7.51
 Argentina MerVal                   12755.20    0.32     9.25
 Colombia IGBC                       9663.29   -0.13    13.06
 Venezuela IBC                      15376.14    0.16     5.40
 Currencies                                    daily    YTD %
                                                   %   change
                                      Latest  change  
 Brazil real                          3.6186   -0.98     9.08
 Mexico peso                         18.4840   -0.21    -6.78
 Chile peso                            687.8   -0.04     3.18
 Colombia peso                       3067.67   -0.52     3.31
 Peru sol                             3.3519   -0.24     1.85
 Argentina peso (interbank)          14.0050    0.04    -7.30
 Argentina peso (parallel)             14.61    0.41    -2.33

 (Reporting by Bruno Federowski; Additional reporting by
Priscila Jordão; Editing by Dan Grebler)
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