August 15, 2017 / 8:19 PM / a year ago

EMERGING MARKETS-Mexico peso weakens as U.S. retail sales foster rate hike bets

 (Updates prices)
    By Bruno Federowski
    SAO PAULO, Aug 15 (Reuters) - The Mexican peso weakened on
Tuesday after news of 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 report suggested the U.S. economy had
momentum early in the third quarter and an upward revision to
the data for May and June 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 about 0.3 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 toward 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 and meatpacker JBS
SA all rose after reporting second-quarter results.
    Argentine markets jumped after results from the country's
mid-term legislative primary election were expected to favor
business-friendly President Mauricio Macri, and the peso
 extended gains for a second day.
    Latin American stock indexes and currencies at 1935 GMT:
 Stock                         Latest     daily %  YTD % change
   indexes                                change   
 MSCI Emerging Markets         1053.96    0.03     22.19
 MSCI LatAm                    2790.36    0.19     18.98
 Brazil Bovespa                68565.33   0.41     13.84
 Mexico IPC                    51291.68   0.24     12.38
 Chile IPSA                    5063.73    0.6      21.98
 Chile IGPA                    25275.43   0.61     21.90
 Argentina MerVal              22670.40   0.58     34.00
 Colombia IGBC                 10698.88   -0.99    5.64
 Venezuela IBC                 185411.92  -0.83    484.80
 Currencies                    Latest     daily %  YTD % change
 Brazil real                   3.1769     0.76     2.28
 Mexico peso                   17.8150    -0.31    16.44
 Chile peso                    648        0.00     3.50
 Colombia peso                 2962.2     0.18     1.33
 Peru sol                      3.245      -0.06    5.21
 Argentina peso (interbank)    17.0600    0.44     -6.95
 Argentina peso (parallel)     18.1       0.00     -7.07
 (Reporting by Bruno Federowski; editing by Grant McCool and Dan
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