November 27, 2019 / 3:27 PM / 17 days ago

EMERGING MARKETS-Latam currencies hit by strong dollar; Brazil's real extends fall

    * Dollar boosted by better-than-expected U.S. data
    * Hopes of U.S.-China trade truce lift sentiment
    * Brazil's real falls for fourth straight day
    * Mexican peso struggles for direction

    By Shreyashi   Sanyal
    Nov 27 (Reuters) - Major Latin American currencies fell on
Wednesday, as the dollar firmed on better-than-expected U.S.
economic data and optimism about a U.S.-China trade deal, while
the Brazilian real declined for the fourth straight session.
    U.S. President Donald Trump said on Tuesday Washington and
Beijing were in the "final throes" of an interim trade deal,
fueling hopes a truce was possible by the end of the year and
propelling global stocks to near-record highs.
    But demand for Latin American currencies has dipped this
week, with investors buying into the dollar as the latest clutch
of data showed U.S. economic growth picked up slightly in the
third quarter, rather than slowing as initially reported.
    The Brazilian real fell again, even as the country's
central bank intervened twice in the previous session to stymie
a slump in the currency.
    The real, which has been battered this month also thanks to
a failed oil auction, fell as much as 1.2% to a record low on
Tuesday.
    "​What's interesting is that inflation (in Brazil) has in
fact remained benign as the real has depreciated (but) that's
not likely to last," said Peter Cecchini, global chief market
strategist at Cantor Fitzgerald.
    Most central banks in Latin America have loosened monetary
policy this year to support flagging economies, but the latest
economic data continues to paint a grim picture.
    Figures from the Mexican central bank this week showed the
economy entered a mild recession during the first half of 2019
and was flat in the third quarter.
    Mexico's peso struggled for direction, as a report
said representatives from the United States, Mexico and Canada
will meet on Wednesday to discuss an agreement to replace the
North American Free Trade Agreement (NAFTA).
    The Colombian peso slipped for the fourth day in a
row. President Ivan Duque announced changes to his unpopular tax
reform proposal on Tuesday, which would cost the government some
3.2 trillion pesos ($931 million).
    Traders also signaled fairly thin volumes in a quiet session
ahead of the U.S. Thanksgiving holiday on Thursday.
    
    Key Latin American stock indexes and currencies at 1505 GMT:
    
        Stock indexes                  Latest      Daily %
                                                   change
 MSCI Emerging Markets                   1050.97        0.3
 MSCI LatAm                              2620.79      -0.17
 Brazil Bovespa                        106764.77      -0.28
 Mexico IPC                             42953.31       0.24
 Chile SPIPSA                            4592.77       0.65
                                                  
 Argentina MerVal                       32800.14      2.139
 Colombia COLCAP                         1587.36       -0.6
                                                           
           Currencies                  Latest      Daily %
                                                   change
 Brazil real                              4.2634      -0.58
 Mexico peso                             19.5408      -0.13
 Chile peso                               809.35      -1.49
 Colombia peso                            3502.8      -0.82
 Peru sol                                 3.3918      -0.23
 Argentina peso (interbank)              59.8500       0.20
                                                  
 

 (Reporting by Shreyashi Sanyal in Bengaluru)
  
Nuestros Estándares:Los principios Thomson Reuters
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