March 19, 2019 / 3:10 PM / 3 months ago

EMERGING MARKETS-Latam currencies rise on Fed expectations; stocks mixed

    By Agamoni Ghosh
    March 19 (Reuters) - Latin American currencies rose against
the U.S. dollar on Tuesday, on expectations that U.S. Federal
Reserve policy makers will not hike interest rates at this
week's two-day policy meeting. Stocks in the region were mixed. 
    MSCI's index of Latin American currencies
gained, as the dollar neared a two-week low on bets that the Fed
will eschew any more rate hikes for the time being, with U.S.
and global growth slowing.
    Last year, emerging market currencies saw significant
outflows due to the steady rise in U.S. borrowing rates.
    "The markets are pricing in only one hike this year," said
Christian Lawrence, senior market strategist, LatAm FX,
Rabobank. 
    "The risk though will be if they aren't as dovish as
expected, then we will see a big sell-off in the EM space," he
added.
    Higher oil prices also helped currencies for net crude
exporters in the region with Mexico's peso rising 0.2
percent.
    Pemex, Mexico's debt-laden state oil company, said it
planned to triple the number of wells it will drill this year,
in a bid to grow crude output and reverse more than a decade of
declining production.
    Pemex, which holds the largest debt of any Latin American
oil company, was downgraded by rating agencies S&P and Fitch
this year, leading to concern about Mexico's sovereign credit
rating.
    "Yes, this a positive development but don't think we can say
all of Pemex's troubles have gone away. The energy market there
needs much more foreign investments and experiences ones," said
Lawrence.
    The Mexican stock market which resumed trade after a
long weekend rose over 1 percent led by Latin American carrier
America Movil after the company said it will acquire
100 percent of Nextel's Brazil operations.
    Stocks in Argentina and Colombia rose.    
Sao Paulo-traded stocks eased off record high levels
dragged by financial and material stocks. 
    Rumo dropped over 5 percent after the logistics
company adjusted its 2019 outlook citing new accounting
standards.
    
 Key Latin American stock indexes and currencies at 1440 GMT

 Stock indexes                        daily %
                             Latest    change
 MSCI Emerging Markets       1070.49     0.12
                                      
 MSCI LatAm                  2894.44     0.71
                                      
 Brazil Bovespa             99685.20    -0.31
                                      
 Mexico IPC                 42598.07     0.96
                                      
 Chile IPSA                  5321.81    -0.05
                                      
 Argentina MerVal           35501.87     1.41
                                      
 Colombia IGBC              13162.94     0.42
                                      
                                             
 Currencies                           daily %
                                       change
                              Latest  
 Brazil real                  3.7815     0.23
                                      
 Mexico peso                 19.0381     0.10
                                      
 Chile peso                    665.8     0.10
                                      
 Colombia peso               3097.28     0.05
 Peru sol                      3.302    -0.09
                                      
 Argentina peso              40.0000     0.23
 (interbank)                          
                                      
 
 (Reporting by Agamoni Ghosh in Bengaluru; Editing by David
Gregorio)
  
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