December 20, 2017 / 2:50 PM / a month ago

EMERGING MARKETS-LatAm currencies mostly weaken as U.S. tax plan advances

    By Bruno Federowski
    BRASILIA, Dec 20 (Reuters) - Most Latin American currencies
weakened on Wednesday after a plan to overhaul the U.S. tax code
advanced in Congress, fueling expectations of faster interest
rate hikes in coming months.
    The Republican-led U.S. Senate approved sweeping tax
legislation in the pre-dawn hours Wednesday, sending the package
back to the House of Representatives for a final vote later in
the day.
    Tax cuts could lift U.S. inflation and force the Federal
Reserve to tighten policy at a faster-than-expected pace,
driving capital away from high-yielding assets. Still, doubts
over the bill's efficacy in boosting U.S. growth kept a lid on
the U.S. dollar's gains.
    "I expect there'll be pressure on the U.S. fiscal accounts
without a substantial improvement to economic growth," Wagner
Investimentos director José Faria Junior said.
    Currencies from Mexico, Chile and Colombia
    slipped between 0.1 percent and 0.3 percent, while the
Brazilian real firmed 0.1 percent.
    The Brazilian real firmed 0.1 percent, while the
benchmark Bovespa stock index rose 0.8 percent.
    Shares of Brazilian banks, such as Itaú Unibanco Holding SA
 and Banco Bradesco SA led gains after the
central bank lowered reserve requirements, injecting 6.5 billion
reais  ($1.97 billion) in the economy.    
    
    Key Latin American stock indexes and currencies at 1720 GMT:
 Stock indexes                               daily %     YTD %
                                              change    change
                                  Latest              
 MSCI Emerging Markets              1133.09     0.08      31.3
 MSCI LatAm                         2768.07      0.6     17.55
 Brazil Bovespa                    73248.12     0.78     21.62
 Mexico S&P/BVM IPC                48486.18     0.17      6.23
 Chile IPSA                         5583.87    -0.08     34.51
 Chile IGPA                        28014.72    -0.08     35.11
 Argentina MerVal                  27892.08     0.67     64.87
 Colombia IGBC                     11099.53    -0.04      9.59
 Venezuela IBC                      1290.63        0    -95.93
                                                              
 Currencies                                  daily %     YTD %
                                              change    change
                                     Latest           
 Brazil real                         3.2935     0.07     -1.35
 Mexico peso                        19.2720    -0.38      7.64
                                                      
 Chile peso                           620.7    -0.11      8.06
 Colombia peso                      2975.26    -0.30      0.88
 Peru sol                             3.284    -0.09      3.96
 Argentina peso (interbank)         17.8400    -0.50    -11.01
                                                      
 Argentina peso (parallel)            18.11     0.77     -7.12
                                                      
 
 (Reporting by Bruno Federowski; Editing by David Gregorio)
  
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