June 21, 2019 / 2:31 PM / a month ago

EMERGING MARKETS-Latam FX mixed: Brazil's real up, Colombian peso awaits cenbank decision

    By Susan Mathew
    June 21 (Reuters) - Mexico's peso slipped in subdued volume
on Friday and Colombia's currency treaded water ahead of a
decision by its central bank on interest rates amid concerns
over U.S.-Iran tensions.  
    The geopolitical worries cut short a strong rally spurred by
some major central banks striking a dovish tone this week,
putting most regional and broader emerging market assets on
course for weekly gains.
    Returning from a holiday, Brazil's real firmed 0.4%
and was on track for a weekly increase of about 1.7%. Late
Wednesday, Brazil's central bank kept its key rate unchanged as
expected and held back from signaling looser policy due to
doubts about economic reforms.
    "We remain of the view that the BCB sits on hold for 2019,
at least until pension reform is closer to completion," Sacha
Tihanyi, deputy head of emerging markets strategy at TD
Securities, said after the central bank decision. 
    "But we push out our call for future tightening by 6 months
to third-quarter of 2020. The bias of near-term risk to our view
remains for additional easing in 2019." 
    Mexico's peso slipped 0.2%, on course for a 0.6%
weekly advance, while Colombia's currency was flat.  
    Colombia's central bank is expected to hold the benchmark 
rate steady at its meeting later in the day in a bid to
jumpstart the economy even as inflation expectations rise, a
Reuters poll of 18 analysts showed.
    The bank may have to see stronger growth data materialize 
before acting and only happen toward the end of the year, Credit
Suisse analyst Juan Lorenzo Maldonado wrote in a note on
Thursday. 
    Among stocks, those in Sao Paulo jumped more than
1%, with gains being broad-based. 
    Equities in Chile, Mexico and Colombia
 were quiet. World stocks fell as
investors worried about possible U.S. military strikes on Iran
in retaliation for the downing of an unmanned U.S. surveillance
drone.
    
    Key Latin American stock indexes and currencies at 1403 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1054.02      0.02
                                        
 MSCI LatAm                    2874.18      1.23
                                        
 Brazil Bovespa              101782.35      1.47
                                        
 Mexico IPC                   43688.39       0.1
                                        
 Chile IPSA                    5049.73     -0.22
                                        
 Argentina MerVal                    -         -
                                        
 Colombia IGBC                12615.98     -0.09
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.8213      0.74
                                        
 Mexico peso                   19.0438     -0.26
                                        
 Chile peso                      683.1      0.04
                                        
 Colombia peso                 3188.15      0.00
 Peru sol                         3.31      0.00
                                        
 Argentina peso                      -         -
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru; Editing by Jeffrey
Benkoe)
  
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