January 12, 2018 / 12:12 AM / a year ago

EMERGING MARKETS-Mexican peso edges higher amid NAFTA uncertainty

 (Recasts with Mexican peso, updates prices)
    MEXICO CITY, Jan 11 (Reuters) - The Mexican peso
strengthened slightly on Thursday, even as U.S. Treasury
Secretary Steven Mnuchin acknowledged that the United States may
pull out of the North American Free Trade Agreement (NAFTA).
    The peso weakened significantly on Wednesday after a Reuters
report said Canada increasingly believes that President Donald
Trump will soon announce his intention to withdraw from NAFTA.

    The move would be a severe setback for Mexico's economy,
which depends on exports to the United States.    
    Mexican officials reiterated on Thursday that if Trump began
the withdrawal process then Mexico would break off NAFTA
negotiations, which are scheduled to resume in January.

    Mnuchin's comments did not appear have much impact on the 
Mexican currency, however, and it gained a wafer-thin
0.02 percent.
    "This was not seen as a threat by market participants,"
Banco Base's Gabriela Siller wrote in a report.      
    Except for Argentina's peso, all other major Latin American
currencies also rose. 
    Mexico's benchmark S&P/BMV IPC index remained flat, boosted
from Wednesday's fall by Cemex, which gained 2.13
percent.
    Among major equities markets, Brazil's Bovespa index
led gains with a 1.49 percent rise, thanks in part to solid
foreign capital inflows from investors looking to buy into a
nascent consumer recovery in Latin America's largest economy.
    "With signs of good international liquidity remaining,
Brazil can still be attractive to new resources from foreign
investors," brokerage Magliano wrote in a note. 
    Among the biggest winners on the Bovespa was private
education company Estácio Participações SA, which
rose 3.07 percent after analysts issued an outperform rating and
raised the target price.
    Its rival, Kroton Educacional SA, was the biggest
loser on the index, slipping 3.63 percent.
        
Key Latin American stock indexes and currencies at 2100 GMT:
 Stock indexes                             daily %     YTD %
                               Latest       change    change
 MSCI Emerging Markets           1198.94      0.12      3.37
                                                    
 MSCI LatAm                      2968.75      1.49      3.43
                                                    
 Brazil Bovespa                 79365.44      1.49      3.88
                                                    
 Mexico IPC                     48799.39      0.03     -1.12
                                                    
 Chile IPSA                      5717.65       0.7      2.75
                                                    
 Chile IGPA                     28755.21      0.65      2.77
                                                    
 Argentina MerVal               32078.22      1.41      6.69
                                                    
 Colombia IGBC                  11648.75     -1.36      2.45
                                                    
 Venezuela IBC                   1391.08      4.79     10.13
                                                    
                                                            
 Currencies                                daily %     YTD %
                                            change    change
                                  Latest            
 Brazil real                      3.2122      0.17      3.15
                                                    
 Mexico peso                     19.2775      0.02      2.19
                                                    
 Chile peso                       605.36      0.50      1.53
                                                    
 Colombia peso                   2854.43      1.11      4.47
 Peru sol                          3.218      0.12      0.59
                                                    
 Argentina peso (interbank)      18.7000     -0.37     -0.53
                                                    
 Argentina peso (parallel)         19.36     -0.21     -0.67
                                                    
 
 (Reporting by Gram Slattery and Daina Beth Solomon; Editing by
Andrew Hay and Tom Brown)
  
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