June 5, 2019 / 2:30 PM / 14 days ago

EMERGING MARKETS-Latam currencies rise, Mexican peso up before top level U.S.-Mexico meeting

    By Susan Mathew
    June 5 (Reuters) - Mexico's peso rose on Wednesday ahead of
a meeting of top officials from Mexico and the United States to
discuss migration issues, while most other Latin American
currencies also firmed as rising expectations of a rate cut by
the U.S. central bank dented the dollar. 
    After declining early in the session, the peso turned around
to rise 0.2% and looked set to extend Tuesday's 1% increase. 
    On Wednesday, Mexican officials will seek to persuade the
White House in talks hosted by U.S. Vice President Mike Pence
that their government has done enough to stem immigration and
avoid looming tariffs. 
    "We think today's meeting with Pence and (Secretary of State
Mike) Pompeo will go well, but probably not enough for a deal to
stop the tariffs now," said analysts at Citigroup Research in a
note.
    "The first round may very well go ahead, but pessimism
should be checked as long as a deal is in sight," they said. The
tariffs are set to take effect on June 10 at an initial 5
percent and rise as high as 25 percent later in the year.
    U.S President Donald Trump on Tuesday said he would push
ahead with tariffs on Mexican imports despite resistance from
his own party. He warned Republicans in Congress not to block
his efforts. 
    The tariffs are aimed at pressuring Mexico to take stronger
action to stop the inflow of illegal migrants into the United
States via the Mexican border.
    Among other regional currencies, the dollar's weakness
helped Colombia's peso touch a three-week high, while 
Chile's currency edged up.  
    The greenback struggled near a seven-week low on after
comments by the U.S. Federal Reserve Chair Jerome Powell and
other Fed officials led to rising hopes of an interest rate cut
by the central bank in response to trade conflict-related risks.

    Brazil's real gave up early gains when it hit its
highest in almost eight weeks, to trade flat. 
    Stocks in Sao Paulo were also little changed. Petrochemaical
company Braskem was the top gainer, up 4%, as it
recovered from a 17% slide last session. 
    Airline Gol Linhas Aereas Inteligentes followed
with its 2.4% rise after reporting strong May traffic numbers.

    But, a decline in bank stocks limited gains. Economy
Minister Paulo Guedes on Tuesday said local banks are chalking
up "excessive" profits and urged injection of competition to end
what he called the cartels that dominate many of its major
sectors.
        
    Key Latin American stock indexes and currencies at 1348 GMT:
 
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1007.81      0.24
                                        
 MSCI LatAm                    2734.21      0.31
                                        
 Brazil Bovespa               97278.64      -0.1
                                        
 Mexico IPC                          -         -
                                        
 Chile IPSA                    5003.22     -0.04
                                        
 Argentina MerVal                    -         -
                                        
 Colombia IGBC                12115.64     -0.35
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.8544      0.05
                                        
 Mexico peso                   19.5379      0.11
                                        
 Chile peso                        693     -0.01
                                        
 Colombia peso                  3286.9      0.10
 Peru sol                        3.348      0.00
                                        
 Argentina peso                44.6700      0.11
 (interbank)                            
                                        
 


 (Reporting by Susan Mathew in Bengaluru;)
  
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