July 27, 2018 / 4:15 PM / 5 months ago

EMERGING MARKETS-LatAm currencies firm after U.S. GDP data

    By Bruno Federowski
    BRASILIA, July 27 (Reuters) - Latin American currencies
strengthened on Friday in the wake of mixed U.S. growth data
which failed to reassure investors that trade frictions would
not be a drag in the second half of 2018.
    The U.S. government reported gross domestic product grew at
a 4.1 percent annualized pace in the second quarter, matching
the median forecast among economists polled by Reuters. Yet the
figure was less impressive on a year-over-year basis, coming in
at 2.8 percent.
    Traders bet a weak U.S. economy could drive the Federal
Reserve to increase interest rates at a slower-than-expected
pace, boosting the allure of high-yielding assets. That could be
accentuated by the impact of a potential trade war between the
United States and China on global growth.
    Currencies from Chile, Mexico, Colombia
 and Peru firmed between 0.3 and 0.7 percent,
tracking worldwide weakness in the U.S. dollar.
    The Brazilian real led gains, supported by investor
hopes that the winner of this year's presidential elections will
implement an agenda of austerity and deregulation seen as key to
restoring Brazil's investment grade rating.
    A centrist coalition on Thursday united behind
business-friendly presidential candidate Geraldo Alckmin,
boosting the chances of a reformist winning the October
election. The businessman tipped to be Alckmin's running mate,
however, declined the offer.
    
    Key Latin American stock indexes and currencies at 1530 GMT:
 Stock indexes                                daily %    YTD %
                                    Latest     change   change
 MSCI Emerging Markets              1092.89      0.34    -5.98
                                                       
 MSCI LatAm                         2730.78      0.85    -4.25
 Brazil Bovespa                    79867.03      0.58     4.54
 Mexico IPC                        49621.96      0.37     0.54
 Chile IPSA                         5427.13     -0.29    -2.47
 Chile IGPA                        27333.77     -0.23    -2.31
 Argentina MerVal                  29485.43      0.96    -1.93
 Colombia IGBC                     12188.12       0.1     7.19
                                                              
 Currencies                                   daily %    YTD %
                                               change   change
                                     Latest            
 Brazil real                         3.7150      0.84   -10.81
                                                       
 Mexico peso                        18.5715      0.30     6.07
                                                       
 Chile peso                           642.6      0.68    -4.35
 Colombia peso                      2875.01      0.30     3.72
 Peru sol                             3.262      0.31    -0.77
                                                       
 Argentina peso (interbank)         27.3400      0.26   -31.97
                                                       
 Argentina peso (parallel)            28.45      0.35   -32.41
                                                       
 
 (Reporting by Bruno Federowski
Editing by James Dalgleish)
  
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