January 17, 2020 / 3:22 PM / a month ago

EMERGING MARKETS-Chilean peso leads Latam FX higher on strong China data

    * Chile's peso gains on higher copper prices
    * Latin American FX index climbs after two days of declines
    * Brazilian miner Vale hits over one-year high
    * Mexican peso, Peruvian sol, Colombian peso firm

    By Sagarika Jaisinghani and Ambar Warrick
    Jan 17 (Reuters) - Gains in the Chilean peso lifted Latin
American currencies on Friday, as stronger-than-expected
economic data from China added to optimism about faster global
growth in the wake of a Sino-U.S. trade truce.
    Chile's peso was on track for its best day in more
than a week as a surprise acceleration in Chinese industrial
output sent copper prices near an eight-month high. Chile is the
world's top producer of the red metal.
    The currency is also set to end the week higher, after
declining in the past two weeks on caution over anti-government
protests last year.
    "The (Chilean peso), relative to the rest of the region, has
really underperformed so we do see it coming back," said James
Barrineau, head of emerging market debt at asset manager
Schroders.
    "Stable growth in China is certainly very important for
Chile. The peso almost trades like an Asian currency rather than
a Latin American currency, in terms of its correlation to Asian
fundamentals and China growth."
    An index of Latin American currencies was up
0.1% after declining for two straight sessions.
    Still, the basket was set for its biggest weekly drop in
over two months, pressured by a fall in one of its biggest
constituents: the Brazilian real.
    The real, which firmed about 0.3% on Friday, has
lagged its regional peers since last year on economic
instability in the country, which prompted the central bank to
trim interest rates four consecutive times in 2019.
    Latest data from Latin America's biggest economy showed a
slight pickup in economic activity for November, confirming
earlier indications of an improvement in GDP heading into 2020,
and sparking hopes of a moderate increase in the real later this
year.
    Brazilian equities rose about 1%, powered by a 2.4%
gain for Vale SA. 
    The miner said on Thursday it had halted tailings operations
at its Esperança mine to potentially carry out work to improve
safety at the site, sending the benchmark Dalian iron ore
futures higher.
    The Mexican peso was up 0.2%, while the Peruvian sol
 and Colombian peso added 0.1% and 0.3%,
respectively.
    
    Key Latin American stock indexes and currencies at 1450 GMT:
   
     Stock indexes              Latest     Daily % change
 MSCI Emerging Markets           1145.75              0.45
                                          
 MSCI LatAm                      2909.73              0.82
                                          
 Brazil Bovespa                117825.75              0.96
                                          
 Mexico IPC                            -                 -
                                          
 Chile SPIPSA                    4880.49             -0.27
                                          
 Argentina MerVal               42707.59             0.815
                                          
 Colombia Colcap                 1648.99              0.07
                                          
                                                          
        Currencies              Latest     Daily % change
 Brazil real                      4.1779              0.27
                                          
 Mexico peso                     18.7405              0.17
                                          
 Chile peso                        772.3              0.41
                                          
 Colombia peso                   3311.31              0.29
 Peru sol                         3.3198              0.07
                                          
 Argentina peso (interbank)      60.0250             -0.07
                                          
 
 (Reporting by Sagarika Jaisinghani in Bengaluru
Editing by Nick Zieminski)
  
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