October 3, 2019 / 3:02 PM / in 5 months

EMERGING MARKETS-Latam FX jumps as dollar slides on dire U.S. data; stocks fall

    By Agamoni Ghosh
    Oct 3 (Reuters) - Latin American currencies moved higher on
Thursday against the dollar as a weak reading of service sector
activity in the United States raised doubts about the health of
the world's largest economy.  
    U.S. services sector growth slowed to its most anemic pace
in three years last month, and job growth in the largest slice
of the American economy was the weakest in half a decade, a
survey of purchasing managers showed on Thursday.  
    Latin American currencies which had made
modest gains since the morning jumped after the greenback slid
but most stock indices reversed course to fall as global
slowdown fears intensified.
    "We know manufacturing in the U.S. is already in recession,
now we have to see if services follow suit," said Christian
Lawrence, senior market strategist, LatAm FX at Rabobank. 
    "For Latam currencies, the move is a short-term reaction to
the dollar's weakness and expect it to fade."
    Colombia's peso and Chile's peso rose nearly
1%, leading gains, while Brazil's real firmed 0.8%.      
    Also helping the real was the latest reading of service
sector activity in Latin America's largest economy which
expanded in September at the fastest pace in six months.

    Investors will now be closely monitoring progress related to
a landmark pension reform bill, whose final vote of approval
from the Senate is expected to be completed by later this month.

    "It's not a done deal yet so that is a lingering risk, but
the market is pretty much pricing in a passage, so any sign of
delay or hindrance to that could result in a huge sell-off,"
said Lawrence.   
    Sao Paulo-listed stocks led losses among stocks,
with shares of consumer good companies falling the most. 
    Brazilian telecom carrier Oi SA slipped over 2%
after Chief Operating Officer Rodrigo Abreu told Reuters it may
sell its mobile operation if it gets attractive offers.

    Mexican stocks made the smallest losses, while those
in Chile slipped 0.4%.  

  Latin American stock indexes and currencies at 14:49 GMT   
 Stock indexes                                daily % change
 MSCI Emerging Markets               990.41             0.12
 MSCI LatAm                         2613.18             0.09
 Brazil Bovespa                   100522.92             -0.5
 Mexico IPC                        42198.33            -0.06
 Chile IPSA                         4994.74            -0.44
 Argentina MerVal                  30648.65            -0.46
 Colombia IGBC                     12760.37            -0.14
 Currencies                                   daily % change
 Brazil real                         4.0939             0.88
 Mexico peso                        19.7526             0.21
 Chile peso                          717.46             0.98
 Colombia peso                      3464.17             0.93
 Peru sol                            3.3748             0.39
 Argentina peso                     57.7850             0.08

 (Reporting by Agamoni Ghosh
Editing by Nick Zieminski)
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