July 19, 2018 / 3:54 PM / 5 months ago

EMERGING MARKETS-Fed remarks keep pressure on Latin American currencies

    SAO PAULO, July 19 (Reuters) - Latin American currencies
plummeted against the dollar on Thursday as traders continued to
eye hawkish signals from the Federal Reserve, while Chile's peso
was battered by a copper price meltdown.
    Traders remained focused on recent comments by Fed Chairman
Jerome Powell to Congress that the U.S. economy was healthy,
sending up the greenback amid bets of rising interest rates. His
comments were supported by statements from other officials at
the U.S. central bank that also led to bets of monetary
tightening.
    Also encouraged by a so-far solid U.S. corporate earnings
season, dollar bulls continued buying in, while political
uncertainty continues to weigh on Latin America's largest
economies, particularly in Brazil.
    Traders there are watching the broad-based 'blocao'
political bloc there, to see who it chooses as a candidate for
the presidential election scheduled for October.
    Brazil's real currency was off 1.07 percent in
mid-day trade while the Mexican peso had fallen 0.84
percent.
    Traders were especially cool on the Chilean peso,
which dropped some 1.4 percent, its biggest intraday loss since
November, as prices for key export copper tanked over 2
percent, hitting one-year lows as fund selling accelerated due
to worries about demand from the U.S.-China trade dispute.
    A break in copper prices through a technical floor at $6,090
a tonne accelerated the selloff.
    Across the region, equities markets were off only slightly
with the notable exception of Brazil's benchmark Bovespa index 
, which fell 1.37 percent in mid-day trade.
    Traders were generally jittery as what is sure to be a messy
convention season for Brazilian political parties to choose
candidates effectively kicks off on Friday.
    Losses were fairly evenly distributed, though the biggest
percentage loser was airline Gol Linhas Aereas Inteligentes SA
, whose shares were off 4.9 percent after analysts at
Deutsche Bank cut their price target on the stock.
    
Key Latin American stock indexes and currencies at 1528 GMT:
    
 Stock indexes                           daily %     YTD %
                             Latest       change    change
 MSCI Emerging Markets         1058.77     -0.93     -7.74
                                                  
 MSCI LatAm                    2561.93     -1.54     -7.99
                                                  
 Brazil Bovespa               76412.32     -1.23      0.01
                                                  
 Mexico IPC                   48913.53     -0.18     -0.89
                                                  
 Chile IPSA                    5370.73     -0.13     -3.48
                                                  
 Chile IGPA                   27108.52     -0.21     -3.12
                                                  
 Argentina MerVal             26898.40     -0.54    -10.53
                                                  
 Colombia IGBC                12247.19     -0.19      7.71
                                                  
 Venezuela IBC               101256.01     -6.22   7916.21
                                                  
                                                          
 Currencies                              daily %     YTD %
                                          change    change
                                Latest            
 Brazil real                    3.8863     -1.19    -14.74
                                                  
 Mexico peso                   19.0700     -0.89      3.30
                                                  
 Chile peso                      661.5     -1.39     -7.08
                                                  
 Colombia peso                 2878.65     -0.54      3.59
 Peru sol                        3.276     -0.21     -1.19
                                                  
 Argentina peso                27.7250     -0.38    -32.91
 (interbank)                                      
                                                  
 Argentina peso                   28.6      0.17    -32.76
 (parallel)                                       
                                                  
 
 (Reporting by Gram Slattery
Editing by James Dalgleish)
  
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below