March 19, 2018 / 11:17 PM / 6 months ago

EMERGING MARKETS-LatAm currencies dip ahead of Fed policy meeting

 (Updates with final prices, detail from Mexico)
    By Bruno Federowski
    SAO PAULO, March 19 (Reuters) - Most Latin American
currencies weakened slightly 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. 
    But traders will scrutinize 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 0.17 and 0.03 percent, while the Colombian peso
 slipped 0.05 percent.
    Brazilian stocks fell over 1 percent, as volatility spiked
due to the expiration of several option contracts. Mexico's
stock exchange was closed due to a national holiday.
    Shares of miners and steelmakers, such as Vale SA
and Usinas Siderúrgicas de Minas Gerais SA, tracked
iron ore prices lower.
    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 2305 GMT:
 Stock indexes                           daily %    YTD %
                                Latest    change   change
 MSCI Emerging Markets          1203.59    -0.79      3.9
                                                  
 MSCI LatAm                     3016.56    -0.66     6.66
                                                  
 Brazil Bovespa                83913.06    -1.15     9.83
                                                  
 Chile IPSA                     5576.54    -0.36     0.21
                                                  
 Chile IGPA                    27940.19    -0.33    -0.15
                                                  
 Argentina MerVal              31747.35    -2.48     5.59
                                                  
 Colombia IGBC                 11500.89      0.9     1.15
                                                  
                                                         
 Currencies                              daily %    YTD %
                                          change   change
                                 Latest           
 Brazil real                     3.2845    -0.17     0.88
                                                  
 Mexico peso                    18.7055    -0.03     5.31
                                                  
 Chile peso                       609.2    -0.20     0.89
                                                  
 Colombia peso                  2854.14    -0.05     4.48
 Peru sol                         3.270     0.06    -1.01
                                                  
 Argentina peso (interbank)       20.19    -0.05    -7.88
                                                  
 Argentina peso (parallel)        20.87    -0.14    -7.86
                                                  
 
 (Reporting by Bruno Federowski
Editing by Alistair Bell)
  
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