March 19, 2018 / 3:31 PM / 6 months ago

EMERGING MARKETS-LatAm currencies seesaw ahead of Fed policy meeting

    By Bruno Federowski
    SAO PAULO, March 19 (Reuters) - Latin American currencies
seesawed on Monday as traders avoided making big bets ahead of a
U.S. Federal Reserve policy meeting, the first under new
chairman Jerome Powell.
    Investors largely expect the Fed to lift its benchmark
overnight lending rate to a range of 1.5 to 1.75 percent at the
end of a two-day meeting on Wednesday and also update its
assessment of the economy. 
    More importantly, traders will be closely eyeing the Fed's
policy statement in search of clues over the pace of future rate
hikes, following signs of Powell's growing confidence in the
U.S. economic recovery.
    Higher U.S. rates could drive capital away from emerging
markets, which offer high yields.
    "There's still much doubt over how much the Fed will tighten
in coming months after the latest economic indicators," Infinity
Asset chief economist Jason Vieira said.
    The Brazilian real and the Mexican peso
weakened between 0.3 and 0.4 percent, while the Colombian peso
 was flat.
    Brazilian stocks, however, fell 0.9 percent, as volatility
spiked due to the expiration of several option contracts.
    Shares of miners and steelmakers, such as Vale SA
and Usinas Siderúrgicas de Minas Gerais SA, tracked
iron ore prices lower. Vale's share subtracted the most points
from the benchmark index.
    Still, shares of Suzano Papel e Celulose SA
jumped for a second day to an all-time high after it won the
battle to acquire larger rival Fibria Celulose SA.
    
    Key Latin American stock indexes and currencies at 1520 GMT:
 Stock indexes                           daily %    YTD %
                                Latest    change   change
 MSCI Emerging Markets          1204.73    -0.69     4.72
                                                  
 MSCI LatAm                     3016.51    -0.66     7.37
                                                  
 Brazil Bovespa                84117.98    -0.91    10.10
                                                  
 Mexico IPC                    47477.58    -0.71    -3.80
                                                  
 Chile IPSA                     5577.43    -0.34     0.23
                                                  
 Chile IGPA                    27952.47    -0.29    -0.10
                                                  
 Argentina MerVal              32026.61    -1.62     6.52
                                                  
 Colombia IGBC                 11500.89      0.9     1.15
                                                  
                                                         
 Currencies                              daily %    YTD %
                                          change   change
                                 Latest           
 Brazil real                     3.2911    -0.40     0.67
                                                  
 Mexico peso                    18.7510    -0.28     5.06
                                                  
 Chile peso                       608.8    -0.13     0.96
                                                  
 Colombia peso                   2854.5     0.04     4.47
 Peru sol                         3.272     0.00    -1.07
                                                  
 Argentina peso (interbank)     20.2550    -0.32    -8.17
                                                  
 Argentina peso (parallel)        20.86     0.14    -7.81
                                                  
 
 (Reporting by Bruno Federowski
Editing by Alistair Bell)
  
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