August 29, 2018 / 10:20 PM / 22 days ago

EMERGING MARKETS-Argentina peso crashes amid tumult; Mexico peso gets NAFTA boost

    MEXICO CITY, Aug 29 (Reuters) - Argentina's peso suffered
its biggest one-day slide in almost three years on Wednesday
after the central bank sold reserves for a second straight day
and the president asked the International Monetary Fund for
early release of standby funds.
    The more than 7 percent fall in the peso was its
biggest one-day decline since the currency was allowed to float
in 2015, prompting central bank interventions and investor
concern that the third-largest Latin American economy may not
meet its debt obligations.
    However, Argentina's MerVal stock index maintained enough
liquidity to rise more than 1 percent.
    Brazil's Bovespa stock index also rose over 1 percent,
favored by lower risk aversion abroad. 
    In Mexico, the peso dipped in morning trading before firming
0.64 percent, boosted by optimism after Canada rejoined talks to
salvage the trilateral North American Free Trade Agreement
(NAFTA). 
    The country's benchmark S&P/BMV IPC index closed up
0.33 percent, with investors keeping an eye on the ongoing
discussions with Canada.
    "Investors are waiting for a successful conclusion of the
renegotiation of NAFTA," Banco Base said in a report.     
    Canadian Prime Minister Justin Trudeau said on Wednesday it
would be possible to meet a Friday deadline to reach an
in-principle agreement set by U.S. President Donald Trump.

    After more than a year of talks, Mexico and the United
States announced a bilateral deal on Monday, clearing the way
for Canada to rejoin talks to update the 24-year-old NAFTA which
accounts for over $1 trillion in annual trade between the three
nations.
    In Chile, the peso strengthened nearly 2 percent, while its
stock index gained slightly, boosted by airline
LATAM. Its shares climbed 3.8 percent after announcing
that it would lay off some 1,200 airport-based employees in
Brazil in an apparent cost-cutting measure. 
    
Key Latin American stock indexes and currencies at 2003 GMT: 
 Stock indexes               Latest         Daily    YTD pct
                                              pct     change
                                           change  
 MSCI Emerging Markets         1,071.24      0.06      -7.58
                                                   
 MSCI LatAm                    2,519.36      0.63     -11.48
 Brazil Bovespa               78,474.90      1.29       2.71
 Mexico IPC                   50,143.70      0.24       1.60
 Argentina MerVal             25,367.51      1.34     -15.63
 Colombia IGBC                12,243.16      0.48       7.67
 Venezuela IBC               327,460.72     -7.64  25,824.34
                                                            
 Currencies                      Latest     Daily    YTD pct
                                              pct     change
                                           change  
 Brazil real                     4.1165     -0.31      24.24
 Mexico peso                    18.9600      0.64       3.90
 Chile peso                       667.3      1.78       8.60
 Colombia peso                    2,999     -0.38      -0.57
 Peru sol                         3.293      0.00      -1.70
 Argentina peso (interbank)     33.9000     -7.08     -45.13
                                                   
 Argentina peso (parallel)        34.05     -2.20     -43.52
                                                   
 
 (Reporting by Daina Beth Solomon; Editing by Richard Chang)
  
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