March 2, 2020 / 2:59 PM / a month ago

EMERGING MARKETS-Brazil, Mexican FX weaken as coronavirus cases rise

    * Brazil 2020 growth, FX outlook slip to new lows - cenbank
survey
    * Brazil confirms second coronavirus case, Mexico its fifth 
    * Mexican peso set for longest losing streak since Dec. 2014
    * Brazil, Chiles stocks rise

    By Susan Mathew
    March 2 (Reuters) - Brazil's real held near all-time lows
hit in the last session, and the Mexican peso weakened 1% on
Monday as worries over the economic fallout from the coronavirus
outbreak increased as the number of cases in both countries rose
over the weekend.
    Brazil reported its second case of the virus on Saturday,
while in Mexico, a fifth case was confirmed.
  
    The real dipped 0.5%, trading at 4.5 to the dollar.
It had closed Friday at 4.473.  
    Amid a report that Brazil's government is set to slash its
2020 growth forecast sometime this week, a central bank survey
of economists showed 2020 outlook for Brazil's economic growth,
inflation and exchange rate slipping to new lows. 
    "We've just heard about coronavirus cases in the region so
there is a general expectation that we're going to see negative 
news around Latin America," said Christian Lawrence, senior
market strategist at Rabobank in New York.
    Mexico's peso fell for an eighth straight session to
19.8726 per dollar, holding near levels lowest since September.
If losses hold, it could be the currency's longest losing streak
since December 2014. 
    The moves were in contrast to most other emerging market
counterparts which firmed on rising hopes of a
coordinated global response from major central banks to help
economies weather the economic damages from the outbreak. 
    Increasing bets that the U.S. Federal Reserve would cut
interest rates sent the dollar sliding.
    The virus-fueled rout intensified last week when the pace of
spread heightened fears of a pandemic and a likely subsequent
global recession, wiping almost $6 trillion from world stocks. 
    In emerging markets, portfolio managers pulled $9.7 billion
out in February on fears over the virus, preliminary data from
the Institute of International Finance showed on Monday.
   
    On the day, optimism from stimulus hopes seemed to fade as
some Asian and most European shares gave up gains to trade in
the negative, while U.S. futures swung wildly between positive
and negative territory.  
    Regionally, Brazil stocks erased early losses to
rise 0.9% led by a 10% rally in Hypera Pharma after
it said it signed a contract to buy a portfolio of 18
pharmaceutical products from Japan's Takeda for $825
million.
    Chile stocks rose 2.2%, looking set to break a
six-session losing streak. 
    But Rabobank's Lawrence expects regional stock markets to
slip into the red as the day progresses.
    "We're in this environment where stock are trying to rally
and then we see a 'sell the bounce' rather than a 'buy the
dip'."
        
    Key Latin American stock indexes and currencies at 1425 GMT:
   Stock indexes            Latest    Daily %
                                      change
 MSCI Emerging Markets       1013.95     0.84
                                      
 MSCI LatAm                  2435.76        1
                                      
 Brazil Bovespa            105053.75     0.85
                                      
 Mexico IPC                        -        -
                                      
 Chile IPSA                  4212.91     2.19
                                      
 Argentina MerVal                  -        -
                                      
 Colombia COLCAP                   -        -
                                      
                                             
       Currencies           Latest    Daily %
                                      change
 Brazil real                  4.4967    -0.37
                                      
 Mexico peso                 19.7635    -0.77
                                      
 Chile peso                    817.8     0.40
                                      
 Colombia peso               3535.35    -0.35
 Peru sol                      3.444     0.26
                                      
 Argentina peso                    -        -
 (interbank)                          
                                      
 
 (Reporting by Susan Mathew in Bengaluru;
Editing by Alistair Bell)
  
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