July 3, 2019 / 7:52 PM / 15 days ago

EMERGING MARKETS-Latam currencies rise as dollar dips, investors return to riskier assets

 (Updates prices)
    By Susan Mathew
    July 3 (Reuters) - Latin American currencies firmed on
Wednesday as the dollar dipped and as investors gauged the
implications of the nomination of the IMF's Christine Lagarde to
head the European Central Bank.
    Markets are hoping that International Monetary Fund head
Lagarde will maintain the ECB's recent dovish tone, which was
echoed by the U.S. Federal Reserve, and had spurred inflows into
riskier assets last month.
    "People think that Lagarde will be more dovish," said
Gustavo Rangel, chief economist, LATAM at ING, adding that
general expectations of a more support from the ECB and Fed are
driving the market on the day.
    Regional currencies rose between 0.2% and 0.8% against the
dollar, with Colombia's peso getting an additional boost
from higher oil prices.
    Brazil' real rose 0.8% with the focus remaining on
pension reforms. A special congressional committee is to vote on
the bill later in the day before it is sent to the Lower House
of parliament.
    Investors are hoping that the bill can be put to vote in the
Lower House before the congressional recess begins on July 18.
    Economy Minister Paulo Guedes also said the economy is
poised to start growing again, and at a "much faster" pace than
the recent past.
    Brazil's services sector data for June showed that Brazil
may have tipped back into recession. On Tuesday the central bank
chief had reiterated that economic recovery will be gradual.

    Most regional stocks market also gained, with Brazil's
Bovespa index hovering near all-time high levels,
tracking the major U.S. indexes which closed at record highs in
a shorter trading day ahead of the Independence Day holiday on
Thursday.
    The rally was spurred by hopes that the Fed would take a
more accommodative turn after data on Wednesday showed the U.S.
trade deficit jumped to a five-month high while services sector
data showed a slowdown in activity.
    Argentine shares fell 1% after scaling yet another
record high earlier in the session. The Merval stock index has
been hitting new life highs for the last three sessions.
    
    Key Latin American stock indexes and currencies at 1930 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1060.61     -0.28
                                        
 MSCI LatAm                    2876.80      1.61
                                        
 Brazil Bovespa              102013.72       1.4
                                        
 Mexico IPC                   43330.28     -0.26
                                        
 Chile IPSA                    5045.45      0.71
                                        
 Argentina MerVal             41357.32     -1.04
                                        
 Colombia IGBC                12645.89       0.7
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.8203      0.87
                                        
 Mexico peso                   19.0218      0.15
                                        
 Chile peso                      677.5      0.34
                                        
 Colombia peso                 3194.98      0.33
 Peru sol                        3.291      0.09
                                        
 Argentina peso                42.0300      0.40
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru;)
  
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