February 21, 2019 / 10:08 PM / a month ago

REFILE-EMERGING MARKETS-Latam FX softer, real drops on caution about pension reform

 (In 13th paragraph, corrects symbol for Colombian stocks)
    By Aaron Saldanha
    Feb 21 (Reuters) - Most Latin American currencies softened
on Thursday against a resurgent dollar, with Brazil's real
leading the losses as caution about the progress of the
government's pension reform proposal weighed, while
commodity-linked currencies such as the pesos of Chile and
Colombia slipped.
    The strengthening dollar combined with a wait-and-see
approach by some investors regarding the passage of the
Brazilian government's pension overhaul proposal, which was
presented to the country's congress on Wednesday, sent the real
 down 1.1 percent.
    Alessandro Faganello, a currency trader with Advanced
Corretora in Brazil, said local investors were optimistic about
the prospects of a smooth passage of the reform proposal but
foreigners were cautious and were looking for politicians'
reactions to the proposal.
    MSCI's index of Latin American currencies
slid 0.8 percent, as the real slid to a near one-month
closing low.
    Sao Paulo-traded stocks rose 0.4 percent, as gains
among financials and utilities outweighed losses among materials
stocks. 
    Steel products maker Cia Sigerurgica Nacional SA
was an exception among materials stocks, surging 9.4 percent.
The firm said it was considering selling preferential shares it
holds in a larger rival.
    Mexico's peso slid 0.3 percent, while strong showings
among local financial stocks pushed the local equity index
 0.9 percent higher. 
    Minutes from the Mexican central bank's latest monetary
policy meeting released on Thursday showed a majority of the
bank's board members warned a fresh credit rating downgrade for
state oil firm Pemex could hit government finances.
    Ratings agency Fitch double-downgraded Pemex's credit to the
last rung of investment grade last month, sparking speculation
that Mexico's sovereign rating was possibly next on the chopping
block.
    Chile's peso fell 0.2 percent, tracking lower prices
of copper - the country's top export - as the metal
retreated from a seven-month peak.    
    Stocks in Chile gained 0.5 percent to end at a
more than two-week closing peak, pushed up by a 2.4 percent rise
in lithium giant Sociedad Quimica y Minera de Chile's preferred
shares. 
    That performance came as fellow lithium miner Albemarle
 provided a bullish outlook for 2019 and clocked a better
than expected quarterly profit.   
    Colombia's peso weakened 0.4 percent, while local
stocks slipped 0.2 percent as weaker oil prices
dragged energy firm Ecopetrol SA 0.8 percent lower.

    Argentina's peso firmed as the country's central bank
hiked the interest rate on short-term notes, or Leliqs, to soak
up excess peso liquidity.       
    Argentina's stocks benchmark fell 1.8 percent as
traders booked some profits. During Wednesday's session, the
index had neared an all-time hit last week.
    
    Key Latin American stock indexes and currencies at 2138 GMT
 Stock indexes                                      daily %
                                        Latest       change
 MSCI Emerging Markets                    1050.99      0.16
 MSCI LatAm                               2874.26     -0.29
 Brazil Bovespa                          96932.27       0.4
 Mexico IPC                              43577.64      0.93
 Chile IPSA                               5439.12      0.53
 Argentina MerVal                        35852.14     -1.78
 Colombia IGBC                           11979.86     -0.24
                                                           
 Currencies                                         daily %
                                                     change
                                           Latest  
 Brazil real                               3.7631     -0.05
 Mexico peso                              19.2765     -0.32
 Chile peso                                 654.1     -0.20
 Colombia peso                             3122.4     -0.42
 Peru sol                                   3.313      0.15
 Argentina peso (interbank)               39.4700      0.51
                                                   
 
 (Reporting by Aaron Saldanha in Bengaluru and Lais Martins in
Sao Paulo; Editing by Peter Cooney)
  
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