August 17, 2017 / 3:32 PM / a year ago

EMERGING MARKETS-LatAm currencies slip as U.S. data triggers profit-taking

    By Bruno Federowski
    SAO PAULO, Aug 17 (Reuters) - Latin American currencies
slipped on Thursday as stronger-than-expected U.S. jobs data
drove investors to book profits on the previous day's rally.
    The Brazilian real slipped 0.5 percent to 3.16 to the
greenback in late morning trading. It had firmed past 3.15 on
Wednesday after minutes from the U.S. Federal Reserve's last
policy meeting showed increasing wariness over recent weak
    According to the document, some policymakers called for
halting interest rate hikes until it becomes clear that trend
will not last, boosting demand for high-yielding emerging market
    Sentiment changed quickly on Thursday, however, after a
report showed the number of Americans filing for unemployment
benefits fell to near a six-month low last week. Analysts said a
further tightening in the U.S. labor market could encourage the
Fed to lay out a plan to start unwinding its massive bond
    The Mexican peso was down 0.4 percent as
renegotiation of the North American Free Trade Agreement
continued. The United States on Wednesday drew a hard line,
demanding major concessions aimed at slashing trade deficits
with Mexico and Canada and boosting U.S. content for autos.

    Latin American stock exchanges were mixed, with Brazil's
benchmark Bovespa stock index trading lower following
four straight days of gains.
    Shares of Centrais Elétricas Brasileiras SA were
the biggest decliners after regulators demanded the
state-controlled power holding return 3 billion reais  ($948
million) received as subsidies to a government fund.

    Concerns that the Brazilian government may not be able to
pass a reform of the social security system, seen as key to
curbing the growth of public debt, also weighed on demand for
stocks in the country.
    "The sentiment in Congress is unfavorable towards the
government," analysts at brokerage Lerosa Investimentos wrote in
a client note, saying Brazil had become a "hostage" to
    Economists polled by Reuters say Brazil will need to
announce new fiscal measures by year-end to meet fiscal targets,
even after softening them.
    Key Latin American stock indexes and currencies at 1510 GMT:
 Stock indexes                                daily %   YTD %
                                     Latest    change  change
 MSCI Emerging Markets               1064.71     0.42   22.96
 MSCI LatAm                          2805.65     0.02   19.85
 Brazil Bovespa                     68466.57    -0.19   13.68
 Mexico S&P/BVM IPC                 51139.59    -0.03   12.04
 Chile IPSA                          5092.73    -0.35   22.68
 Chile IGPA                         25430.12    -0.28   22.65
 Argentina MerVal                   22853.81    -0.15   35.09
 Colombia IGBC                      10981.31     1.16    8.42
 Venezuela IBC                     186762.06     0.44  489.06
 Currencies                                   daily %   YTD %
                                               change  change
 Brazil real                          3.1603    -0.49    2.81
 Mexico peso                         17.7400    -0.39   16.93
 Chile peso                           645.35    -0.24    3.93
 Colombia peso                       2976.42    -0.37    0.84
 Peru sol                              3.242    -0.03    5.31
 Argentina peso (interbank)          17.2350    -0.09   -7.89
 Argentina peso (parallel)              18.3     0.00   -8.09
 (Reporting by Bruno Federowski; Editing by Tom Brown)
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