April 25, 2018 / 3:58 PM / a month ago

EMERGING MARKETS-LatAm currencies slump as U.S. bond yields test 3 pct milestone

    By Bruno Federowski
    BRASILIA, April 25 (Reuters) - Latin American currencies
resumed their slump on Wednesday as yields on U.S. bonds rose
past the 3 percent landmark, propping up the dollar on a global
scale.
    Concerns over increased U.S. federal borrowing in the wake
of a tax overhaul, as well as expectations of accelerating
inflation, have driven a selloff in U.S. debt that dampened
demand for higher-yielding, emerging-market assets.
    Yields on 10-year U.S. Treasuries edged above 3 percent this
week, paving the path for it to visit levels not seen since July
2011.
    The Brazilian real weakened past 3.50 to the dollar
for the first time in almost two years, tracking wider weakness
across Latin America.
    "The trading range for the Brazilian real has definitely
changed but it is still too soon to tell what it will be," said
Mario Battistel, the head of currency trading at Fair brokerage.
    The Mexican peso slipped 1.4 percent, while the
Colombian peso fell 1.3 percent.
    Stock indexes were mostly lower, with Brazil's benchmark
Bovespa stock index down 0.7 percent.
    Shares in state-controlled oil company Petróleo Brasileiro
SA were among the biggest decliners following local
media reports that the auction of the so-called transfer of
rights area may be delayed to 2019.
    Representatives for Petrobras, as the company is known, and
the government did not respond to requests for comment.
    Key Latin American stock indexes and currencies at 1530 GMT:
 Stock indexes                            daily %    YTD %
                                           change   change
                               Latest              
 MSCI Emerging Markets          1139.09     -1.31    -0.37
                                                   
 MSCI LatAm                     2939.16     -1.34     5.34
                                                   
 Brazil Bovespa                84841.67     -0.73    11.05
 Mexico IPC                    48128.54      0.17    -2.48
 Chile IPSA                     5669.96     -0.08     1.89
                                                   
 Chile IGPA                    28506.40     -0.13     1.88
 Argentina MerVal              29925.39      -2.1    -0.47
                                                   
 Colombia IGBC                 12261.13     -0.97     7.83
                                                   
                                                          
 Currencies                               daily %    YTD %
                                           change   change
                                                   
                                 Latest            
 Brazil real                     3.5054     -1.05    -5.48
                                                   
 Mexico peso                    19.0875     -1.43     3.20
                                                   
 Chile peso                       604.4     -0.96     1.70
                                                   
 Colombia peso                   2818.8     -1.28     5.79
 Peru sol                         3.246     -0.49    -0.28
                                                   
 Argentina peso (interbank)     20.2575      0.01    -8.18
                                                   
 Argentina peso (parallel)        20.49      0.49    -6.15
                                                   
 

 (Reporting by Bruno Federowski; Editing by Andrea Ricci)
  
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