November 15, 2018 / 3:31 PM / 6 months ago

EMERGING MARKETS-Mexico steady ahead of meeting, Argentine peso lower

    Nov 15 (Reuters) - The Mexican peso was steady against a
strong dollar on Thursday ahead of a Bank of Mexico meeting when
a rate rise is widely expected, while most other Latin American
currencies fell as investors sought safe-haven investments after
Britain's Brexit agreement was thrown into chaos.
    The greenback rose after Britain's chief negotiator for the
long-awaited agreement to leave the European Union quit just
hours after it had been unveiled, roiling markets and sending
investors scurrying for safe bets.
    Financial markets in Brazil were closed for a local holiday.
    The Mexican peso was little changed with investors
awaiting the central bank meeting later in the day when analysts
expect a quarter basis point hike in interest rates to 8
    Persistently high inflation and more recently, uncertainty
about economic policy under the incoming government have led to
a sharp weakening in the peso since the bank's last meeting in
    "We expect the bank's communiqué to keep a hawkish tone and
to reiterate that Mexico requires a "prudent and firm" monetary
policy stance," analysts at Credit Suisse said in a note.
    "We do not envision changes in the forward guidance
paragraph, and we think that the bank will underline that the
balance of risks to inflation remains biased to the upside."
    The Argentine peso declined half a percent. The
country's senate passed the government's 2019 budget bill early
on Thursday which projects 2019 inflation at 23 percent while
expecting the economy to shrink 0.5 percent.
    October inflation data for Argentina is expected later in
the day with analysts at Citigroup forecasting a rise reflecting
the pass-through from the peso's depreciation.
    Among stock markets, Mexico's IPC index was flat,
while Argentina's Merval rose more than 1.5 percent.
    Key Latin American stock indexes and currencies at 1504 GMT:
 Stock indexes                             daily %       YTD %
                               Latest       change      change
 MSCI Emerging Markets            979.92      1.22      -16.43
 MSCI LatAm                      2587.67      0.19       -8.68
 Mexico IPC                       42302.      -0.1      -14.53
 Chile IPSA                      5153.54      0.35        0.35
 Argentina MerVal               29915.75      1.85       -0.50
 Colombia IGBC                  12180.24      0.14        7.12
 Currencies                                daily %       YTD %
                                            change      change
 Mexico peso                     20.4050      0.00       -3.46
 Chile peso                        679.3      0.52       -9.52
 Colombia peso                    3202.6     -0.02       -6.89
 Peru sol                          3.386     -0.06       -4.40
 Argentina peso (interbank)      36.1000     -0.42      -48.48

 (Reporting by Susan Mathew in Bengaluru;
Editing by Susan Thomas)
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