for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

EMERGING MARKETS-Currencies rise after Fed; Russian rouble slides on U.S. sanctions threats

    * Dollar falls after Fed statement 
    * Brazilian real rises ahead of c.bank decision
    * U.S. report shows Russian meddling in 2020 U.S. elections 
    * Biden says Putin 'will pay the price,' rouble slides up to
1.5%

 (Adds comments, details; Updates prices throughout)
    By Shreyashi Sanyal
    March 17 (Reuters) - Most emerging market currencies edged
higher against a weaker dollar on Wednesday, after the U.S.
Federal Reserve pledged to keep interest rates near zero for
years to come, while Russia's rouble slumped on the risk of new
sanctions against Moscow.  
    The dollar fell after the U.S. central bank projected
a rapid jump in U.S. economic growth and inflation this year as
the COVID-19 crisis winds down.
    The Mexican peso and South Africa's rand jumped over
1%, while the Brazilian real rose 0.6%. The MSCI's
index of EM currencies rose 0.1%, reversing
declines from earlier in the session. 
    "There was just a lot of anxiety which definitely pumped-up
bond yields so far, but the Fed’s very dovish kind of response
for a quite strong economic outlook is a big sigh of relief
which we think could help maintain yields at current levels if
not slow them down a little in the short term," said Anthony
Denier, chief executive officer of trading platform Webull.     
    Riskier currencies such as those of emerging markets thrive
on U.S. interest rates remaining low as they benefit from the
interest rate differential that increases their appeal for carry
trade.
    The rouble, however, slipped 1% at 73.64 against the
greenback.  
    "He will pay a price," President Joe Biden told ABC News in
an interview that aired on Wednesday. A U.S. intelligence report
on Tuesday bolstered longstanding allegations that Putin
directed efforts to swing the election to Donald Trump, and
sources said sanctions on Russian could come as soon as next
week. 
    "The comments from Biden were a lot more aggressive than
what markets were anticipating," said Simon Harvey, FX analyst
at Monex Europe, adding that the market now expects broad-based
and more targeted economic sanctions towards domestic markets
than previously imposed. 
    The latest threat comes after the United States and European
Union imposed sanctions, albeit limited, over the alleged
poisoning of Kremlin critic Alexei Navalny.            
    In Brazil, the country's central bank later in the day is
expected to hike interest rates for the first time in six years
as inflation surges. The government on Wednesday sharply raised
its inflation outlook for this year to 4.4% from 3.2%.

    "Policy normalisation will weigh on consumer confidence and
the economic recovery, and will not be an ultimate fix for the
real," said Chris Shiells, managing analyst, emerging markets at
Informa Global Markets.
    "Markets have already priced in at least a 50-bps hike and
swap rates are looking at the chance of a 100-bps rate hike.
Thus, there is a chance the central bank will disappoint markets
if it fails to deliver at least 50 bps."
    The real is among the worst-performing EM currencies
year-to-date, down 8%, thanks to worries about fiscal spending,
political interference and rising inflation. 

Key Latin American stock indexes and currencies at 1912 GMT;
    
       Stock indexes                 Latest    Daily %
                                                change
 MSCI Emerging Markets                1348.14     -0.07
 MSCI LatAm                           2339.52      1.24
 Brazil Bovespa                     116319.33      2.02
 Mexico IPC                          47791.51     -0.86
 Chile IPSA                           4909.40      0.09
 Argentina MerVal                    49667.99     0.043
 Colombia COLCAP                      1346.97     -0.23 Currencies                Latest    Daily %
                                                change
 Brazil real                           5.5830      0.58
 Mexico peso                          20.3520      1.32
                                               
 Chile peso                             721.9      0.69
 Colombia peso                        3569.25     -0.32
 Peru sol                              3.7028     -0.08
 Argentina peso (interbank)           91.2000     -0.07
                                               
 Argentina peso (parallel)                141      2.13
                                               
 

        
For GRAPHIC on emerging market FX performance in 2021, see tmsnrt.rs/2egbfVh

For GRAPHIC on MSCI emerging index performance in 2021, see tmsnrt.rs/2OusNdX
    
    For TOP NEWS across emerging markets
    For CENTRAL EUROPE market report, see
    For TURKISH market report, see
    For RUSSIAN market report, see

 (Reporting by Susan Mathew and Shreyashi Sanyal in Bengaluru;
Additiona reporting by Shashank Nayar in Bengaluru; Editing by
Nick Zieminski and Lisa Shumaker)
  
for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up