August 20, 2018 / 10:00 PM / 2 months ago

EMERGING MARKETS-Brazil's real currency dips after presidential poll

 (Updates prices, adds Venezuela context)
    By Bruno Federowski
    BRASILIA, Aug 20 (Reuters) - The Brazilian real slipped on
Monday after an opinion poll showed the market's preferred
candidate in October's presidential elections lagging far behind
his rivals.
    Geraldo Alckmin, a center-right establishment politician
backed by a broad centrist coalition, has only 4.9 percent
support, according to the survey by CNT/MDA.
    Jailed former President Luiz Inácio Lula da Silva, who has
railed against austerity even as the fiscal deficit ballooned,
has received increased support and would win the vote if allowed
to run for office, the poll showed, followed by far-right
candidate Jair Bolsonaro.
    In Mexico, the peso fell as investors worried the impact of
the sell-off of Turkey's currency could spread. However, the
country's benchmark stock index gained more than 1 percent on
opportunistic buying after the bourse fell to its worst level
since July 5 late last week.
    Ricardo Gomes da Silva, head of currency trading at
Correparti brokerage in Sao Paulo, said Brazilian markets will
probably sell off whenever polls show Alckmin losing support. 
    The nation's benchmark Bovespa stock index, however,
rose 0.39 percent as iron ore prices helped lift shares of
miners and steelmakers, such as Vale SA and Cia
Siderurgica Nacional SA (CSN).
    Steelmaker CSN's shares were also boosted by an announcement
on Friday that it will pay 890 million reais in extraordinary
dividends.
    Other emerging market currencies were flat or lower as
investors took a cautious stance ahead of meetings between the
United States and China later this week. Trade tensions between
the world's top two economies have dented demand for risky
assets in recent months.
    In Venezuela, the government slashed five zeros from prices
as part of a broad economic plan that President Nicolas Maduro
argues will tame hyperinflation but critics call another raft of
failed socialist policies that will push the chaotic country
deeper into crisis.
    The International Monetary Fund has estimated that the
Venezuelan economy will have 1 million percent inflation by year
end.
    Key Latin American stock indexes and currencies at 2055 GMT:
    
 Stock indexes            Latest   daily % change  YTD % change
 MSCI Emerging Markets    1033.65            1.05        -10.77
                                                   
 MSCI LatAm               2508.77            0.32        -11.29
                                                   
 Brazil Bovespa          76327.89            0.39         -0.10
                                                   
 Mexico IPC              48785.48            1.08         -1.15
                                                   
 Argentina MerVal        26238.82            -2.6        -12.73
                                                   
 Colombia IGBC           12074.71            0.22          6.19
                                                   
 Venezuela IBC          219356.30           36.52      17265.95
                                                   
                                                               
 Currencies               Latest   daily % change  YTD % change
                                                   
                                                   
 Brazil real               3.9667           -0.24        -16.47
                                                   
 Mexico peso              18.9900           -0.54          3.73
                                                   
 Chile peso                667.82            0.07         -7.96
                                                   
 Colombia peso            3029.06            0.06         -1.55
                                                   
 Peru sol                   3.306            0.15         -2.09
                                                   
 Argentina peso           29.8400           -0.13        -37.67
 (interbank)                                       
                                                   
 Argentina peso              29.8           -0.50        -35.47
 (parallel)                                        
                                                   
 
 (Reporting by Bruno Federowski
Additional reporting by Claudia Violante in Sao Paulo
Editing by Jonathan Oatis and Phil Berlowitz)
  
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