August 15, 2017 / 3:14 PM / a year ago

EMERGING MARKETS-LatAm currencies down as U.S. retail sales foster rate hike bets

    By Bruno Federowski
    SAO PAULO, Aug 15 (Reuters) - Latin American currencies
mostly weakened on Tuesday after the largest gain in U.S. retail
sales in seven months, leading traders to rethink skepticism
about a potential U.S. rate hike this year.
    The retail sales gains suggested the U.S. economy had
momentum early in the third quarter and an upward revision to
the data for June and May relieved concerns about a slowdown in
consumer spending at the start of the year.
    The report likely keeps the Federal Reserve on track to hike
again in December, potentially draining funds away from emerging
markets, BGC Liquidez currency trader Francisco Carvalho said.
    The Mexican peso weakened 0.6 percent, while the
Colombian peso slipped 0.5 percent. 
    Losses were limited, however, by easing tensions between the
United States and North Korea, which drove some demand for risky
assets and triggered a second day of gains in stock markets in
developed economies.
    Pyongyang state media said that North Korean leader Kim Jong
Un has delayed a decision on firing missiles towards Guam while
he waits to see what the United States does next. Fears over
military conflict had driven sharp losses in emerging markets
last week.
    Latin American stock markets were mixed on Tuesday, with
Brazil's benchmark Bovespa stock index rising in the
wake of a strong batch of corporate updates.
    Mall operator BR Malls Participações SA, food
processor Marfrig Global Foods SA, meatpacker JBS SA
 and toll road operator CCR SA all rose
after reporting their second quarter results.
    Argentina's Merval benchmark stock index slipped 1.1
percent as traders booked profits from the previous day's rally,
but the peso extended gains for a second day.
    Argentine markets jumped after results from the country's
mid-term legislative primary election were expected to favor
business-friendly President Mauricio Macri.
    Latin American stock indexes and currencies at 1440 GMT:
 Stock indexes                                daily %    YTD %
                                     Latest    change   change
 MSCI Emerging Markets               1052.20    -0.14    22.19
 MSCI LatAm                          2776.53     -0.3    18.98
 Brazil Bovespa                     68629.88     0.51    13.95
 Mexico S&P/BVM IPC                 51208.58     0.08    12.19
 Chile IPSA                          5063.73      0.6    21.98
 Chile IGPA                         25275.43     0.61    21.90
 Argentina MerVal                   22321.77    -0.97    31.94
 Colombia IGBC                      10732.40    -0.68     5.97
 Currencies                                   daily %    YTD %
                                               change   change
 Brazil real                          3.1982     0.10     1.60
 Mexico peso                         17.8660    -0.59    16.11
 Colombia peso                       2983.43    -0.54     0.61
 Peru sol                              3.247    -0.12     5.14
 Argentina peso (interbank)          17.0500     0.50    -6.89
 Argentina peso (parallel)             18.05     2.38    -6.81
 (Reporting by Bruno Federowski; editing by Grant McCool)
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