September 13, 2017 / 8:16 PM / in a year

EMERGING MARKETS-LatAm currencies ease as U.S. producer prices rise

 (Updates prices)
    By Bruno Federowski
    SAO PAULO, Sept 13 (Reuters) - Latin American currencies
weakened on Wednesday after U.S. producer prices rebounded in
August, sparking bets on accelerating inflation that could drive
the Federal Reserve to raise U.S. interest rates again this
    A surge in the cost of gasoline drove U.S. producer prices
0.2 percent higher in August after slipping 0.1 percent in July,
and there were also signs of a pickup in underlying producer
    The increase fueled expectations that consumer inflation
data due on Thursday could surpass analysts' expectations,
bringing some comfort to the U.S. central bank that the pace of
price hikes may be advancing toward its target of 2 percent.
    Inflation has lagged expectations for months despite signs
of labor market tightening, puzzling Fed policymakers and
casting doubts over its stated plan of hiking rates for a third
time this year. Should it follow through with those plans, that
could hamper investor demand for high-yielding emerging market
    The Brazilian real slipped 0.25 percent, and the
Mexican peso fell 0.09 percent. Chile's peso
led the region's losses, dropping 0.74 percent as it tracked a
decline in copper prices.
    Brazil's benchmark Bovespa stock index rose 0.5
    Traders were somewhat cautious after Brazil's top court
approved a new graft probe against President Michel Temer for
suspected corruption involving a decree regulating the country's
    The investigation could delay his efforts to implement
market-friendly reforms.
    Shares in JBS SA jumped nearly 2 percent in
volatile trading after police detained its chief executive
officer, saying he used insider information to avoid hefty
losses related to a plea bargain signed earlier this year.

    Traders said the move could accelerate a change in command
that may help the world's largest meatpacker lick the wounds
from a massive corruption scandal.
    Key Latin American stock indexes and currencies at 1943 GMT:
 Stock indexes                          daily %      YTD %
                         Latest          change     change
 MSCI Emerging Markets       1098.62      -0.33      27.83
 MSCI LatAm                  2962.31      -0.38      27.04
 Brazil Bovespa             74936.20       0.53      24.42
 Mexico IPC                 50180.98      -0.59       9.94
 Chile IPSA                  5162.91      -0.12      24.37
 Chile IGPA                 25804.31      -0.11      24.45
 Argentina MerVal           23797.01       1.14      40.66
 Colombia IGBC              11172.84      -0.24      10.32
 Venezuela IBC             351810.03      16.03    1009.63
 Currencies                             daily %      YTD %
                                         change     change
 Brazil real                  3.1364      -0.25       3.60
 Mexico peso                 17.7480      -0.09      16.88
 Chile peso                   626.65      -0.74       7.03
 Colombia peso               2910.25      -0.06       3.14
 Peru sol                      3.238      -0.15       5.44
 Argentina peso              17.0600       0.12      -6.95
 Argentina peso                 17.8       0.45      -5.51
 (Reporting by Bruno Federowski, editing by G Crosse and Cynthia
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