August 21, 2018 / 10:08 PM / 2 months ago

EMERGING MARKETS-Brazil currency falls to more than two-year low

 (Recasts throughout, updates prices)
    By Bruno Federowski
    BRASILIA, Aug 21 (Reuters) - Most emerging market currencies
worldwide rallied on Tuesday after U.S. President Donald Trump
criticized the head of the Federal Reserve for raising interest
rates, while Brazil's real fell to its lowest in more than two
years on political concerns. 
    The real weakened past four to the U.S. dollar for
the first time since March 2016 in afternoon trading, as
investors fretted over the country's latest election polls.

    A string of presidential election surveys showed former Sao
Paulo Governor Geraldo Alckmin, the market's preferred
candidate, still failing to gain traction in the race.

    The benchmark Bovespa stock index was also down,
slipping 1.5 percent.
    Trump told Reuters in an interview on Monday that he was
"not thrilled" with Fed Chair Jerome Powell's rate hikes and
said the U.S. central bank should do more to help him boost the
economy.
    His remarks, which seemed to break with the time-honored
standard of central bank autonomy, suggested Trump would like to
keep a lid on the U.S. dollar as part of his efforts to reduce
the U.S. trade deficit.
    High interest rates could draw capital away from
emerging-market economies toward the United States, boosting the
greenback.
    Currencies from Mexico, Chile, Colombia and Peru firmed
between 0.23 percent and 1.74 percent.
    Also on Tuesday, the designated NAFTA negotiator for
Mexico's incoming president said talks between U.S. and Mexican
trade officials are "making good progress (and) coming to the
end."
    Jesus Seade, President-elect Andres Manuel Lopez Obrador's
representative in the trade talks, said in Washington that he
expects U.S. and Mexican officials to reach a deal by early next
week.
    U.S. and Mexican trade ministers resumed talks over the
North American Free Trade Agreement on Tuesday, in a final push
for a deal on the regional auto industry that would pave the way
for Canada to return to negotiations later this week.
        
    Key Latin American stock indexes and currencies at 2055 GMT:
    
 Stock indexes              Latest         Daily    YTD pct
                                             pct     change
                                          change  
 MSCI Emerging Markets        1,044.31      1.03      -9.85
                                                  
 MSCI LatAm                   2,492.70     -0.64     -11.86
                                                  
 Brazil Bovespa              75,180.40      -1.5      -1.60
                                                  
 Mexico IPC                  49,344.05      1.14      -0.02
                                                  
 Argentina MerVal            26,064.99     -0.66     -13.31
                                                  
 Colombia IGBC               12,122.51       0.4       6.61
                                                  
 Venezuela IBC              337,133.19     53.69  26,590.09
                                                  
                                                           
 Currencies                     Latest     Daily    YTD pct
                                             pct     change
                                          change  
 Brazil real                    4.0487     -0.29     -18.16
                                                  
 Mexico peso                   18.9550      0.23       3.93
                                                  
 Chile peso                      663.8      0.61      -7.40
                                                  
 Colombia peso                 2,977.2      1.74       0.16
 Peru sol                        3.293      0.39      -1.70
                                                  
 Argentina peso                29.9950     -0.38     -37.99
 (interbank)                                      
                                                  
 Argentina peso                   30.3     -1.32     -36.53
 (parallel)                                       
                                                  
 
 (Additional reporting by Claudia Violante in Sao Paulo; Editing
by Meredith Mazzilli and Tom Brown)
  
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