August 23, 2019 / 1:59 PM / 4 months ago

EMERGING MARKETS-Mexican peso at 8-month low, broader Latam FX weak as China retaliates

    Aug 23 (Reuters) - Latin American currencies weakened
against the U.S. dollar on Friday after China imposed
retaliatory tariffs on U.S. goods, renewing fears of a global
slowdown, while the Mexican peso dropped to near 8-month lows on
worrying domestic growth data.
    The peso fell as much as 0.6% to trade at 19.9374 per
dollar - its weakest since late December - after Mexican gross
domestic product data showed the economy stagnated in the second
quarter and was even closer to entering a recession in the first
half of 2019 than previously estimated.
    The peso was last down 0.2%.
    Brazil's real fell 0.5%, in line with emerging market
peers, as risk appetite took a hit after China unveiled
retaliatory tariffs on about $75 billion worth of U.S. goods,
adding 10% on top of existing rates in the latest tit-for-tat
exchange.
    Sao Paulo-listed shares also fell 0.8%, mirroring
weakness in global stock markets and a slump in oil prices.

    The latest salvo from China came as a year-long trade war
between the two biggest economies threatened to tip the global
economy into recession, with investors betting central banks and
governments will do more to support growth.
    Investors are now focused on a highly anticipated speech
from Federal Reserve chief Jerome Powell at an economic
symposium in Jackson Hole, Wyoming at 10 a.m. (1400 GMT).
    Deteriorating manufacturing activity around the world,
exacerbated by the U.S.-China trade spat, has underpinned bets
that U.S. policymakers would opt to provide more stimulus to
preserve growth, a factor that has helped capital inflows into
risky, emerging market assets. 
    However, doubts about the timing and number of rate cuts
have emerged this week.
    Peru's sol slid 0.13% after the finance ministry
slashed its view for economic growth in 2019 to 3% from its
previous estimate of 4.2%, citing U.S.-China trade tensions and
weak mining and fishing activity.   
         
    Latin American stock indexes and currencies at 1330 GMT:
    
 MSCI Emerging Markets       976.74     0.11
                                     
 MSCI LatAm                 2561.03    -1.04
                                     
 Brazil Bovespa            99217.03    -0.79
                                     
 Mexico IPC                       -        -
                                     
 Chile IPSA                       -        -
                                     
 Argentina MerVal                 -        -
                                     
 Colombia IGBC                    -        -
                                     
                                            
      Currencies           Latest    Daily %
                                     change
 Brazil real                 4.0803    -0.08
                                     
 Mexico peso                19.8550    -0.20
                                     
 Chile peso                   716.7    -0.45
                                     
 Colombia peso              3396.42    -0.25
                                     
 Peru sol                    3.3748    -0.13
                                     
 Argentina peso             55.2500    -0.21
 (interbank)                         
                                     
 

 (Reporting by Sruthi Shankar in Bengaluru; Editing by
Bernadette Baum)
  
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