March 1, 2019 / 3:00 PM / 7 months ago

EMERGING MARKETS-Latam FX dips, Brazil's real soft as traders trim positions

    By Aaron Saldanha
    March 1 (Reuters) - Latin American currencies weakened
against a firmer U.S. dollar on Friday, as traders sold Brazil's
real to trim exposure ahead of market holidays next week.
    Brazil markets are shut Monday and Tuesday for the Carnival
holidays, with trade resuming late on Ash Wednesday. The long
holiday break prompted Brazilian market participants to curb
their exposure while watching to see how much lawmakers may
water down President Jair Bolsonaro's proposed pension system
overhaul. 
    "President Bolsonaro said at a gathering with journalists
yesterday that he is willing to negotiate on pension reform,"
Citi Research Head of Emerging Market strategy Dirk Willer and
Emerging Markets FX Strategist Kenneth Lam wrote in a note.
    "While concessions may increase the likelihood of passing
pension reform, it is surprising that the president is signaling
flexibility publicly at such an early stage of negotiations."   
 
    The real was 1 percent lower, set for its biggest
daily decline in more than a week.
    Brazilian stocks dipped 0.3 percent, as losses in
financials and consumer staple shares outweighed gains among
materials stocks.
    Latin America's biggest beverages firm, Ambev SA
slid toward its lowest close in more than seven weeks, a day
after flagging higher production costs in Brazil during 2019.

    Mexico's peso dipped 0.1 percent and was on course to
post a weekly loss of about 0.8 percent.
    The high yield of Mexican assets has made them attractive to
Japanese retail investors. Still, the peso is not without its
risks, said Kota Hirayama, senior emerging markets economist at
SMBC Nikko Securities, pointing to Mexico's growing fiscal
deficit and concerns about state-owned oil company Pemex.

    Chile's peso slipped 0.1 percent, weighed on by lower
prices of copper, the country's top export.    
    Chilean shares retraced a sliver of their
weekly loss but remained on track for the biggest weekly decline
in a year, 3.4 percent.
    The local stock index has been pressured by preferred shares
of lithium producer Sociedad Quimica y Minera de Chile
, which reported a disappointing fourth-quarter
profit.
    Argentina's stocks benchmark rose 1.4 percent on
broad-based gains, while the country's peso softened.    
 
    
    Key Latin American stock indexes and currencies at 1425 GMT
    
 Stock indexes                                          daily %
                                            Latest       change
 MSCI Emerging Markets                        1052.47      0.14
 MSCI LatAm                                   2794.91     -0.93
 Brazil Bovespa                              95302.42     -0.29
 Mexico IPC                                         -         -
 Chile IPSA                                   5298.77      0.21
 Argentina MerVal                            34974.10      1.42
 Colombia IGBC                                      -         -
                                                               
 Currencies                                             daily %
                                                         change
                                               Latest  
 Brazil real                                   3.7867     -0.91
 Mexico peso                                  19.2908     -0.07
 Chile peso                                    656.66     -0.18
 Colombia peso                                3089.32     -0.29
 Peru sol                                       3.305     -0.21
 Argentina peso (interbank)                   39.2400     -0.15
                                                       
 
 (Reporting by Aaron Saldanha in Bengaluru, Additional reporting
by Shinichi Saoshiro in Tokyo; Editing by David Gregorio)
  
Nuestros Estándares:Los principios Thomson Reuters
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