February 8, 2019 / 2:45 PM / 13 days ago

EMERGING MARKETS-Latam FX strengthens, Brazil shares buck global gloom

    By Susan Mathew
    Feb 8 (Reuters) - Latin American currencies firmed against a
steady dollar on Friday, while shares of top lenders bolstered
Brazilian stocks, which were on course to rise for the first
time in four VEsessions.
    Chile's peso rose 0.4 percent and led gains among
regional currencies, while the Colombian peso tracked oil
prices higher.
    Christian Lawrence, a senior market strategist at Rabobank, 
attributed the day's currency moves to a bit of squaring up of
positions heading into the weekend.
    Brazil's real was down slightly after gaining earlier
in the session, while the Mexican peso was up 0.2
percent, extending gains from the previous session when it rose
after the country's central bank held the benchmark borrowing
rate steady.
    "Overall, the statement did nothing to change our view that
Banxico is likely to remain on hold for the remainder of this
year before cutting rates in the first half of 2020," Lawrence
said, adding that if sustained peso weakness were to emerge,
there is potential for one 25 basis points hike this year.      
    But, Lawrence says the rally in regional currencies may not
sustain through the day as "we might get a dollar rally and that
should result in some weakness in Latam currencies. "
    "But, its going to be within muted ranges. I don't expect
any large currency moves today," he said.
    Even as markets sagged worldwide amid worries of a global
economic slowdown and the unlikelihood of a quick resolution of
the U.S.-China trade dispute, Brazil shares were up 0.6
percent.
    Financial shares drove gains on the Bovespa stock index,
which rose for the first time in four sessions. The index,
however, was still set for its steepest weekly loss since
November, after six consecutive weeks of gains. 
    Lender Itau Unibanco Holding provided the biggest
boost, up 2.1 percent. Banco Bradesco rose after its
board of directors registered a proposal to raise the bank's
capital by 8 billion reais ($2.15 billion) with a stock bonus of
two new shares for every 10 held by investors.
    
     Key Latin American stock indexes and currencies at 1417
GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1036.84     -0.49
                                        
 MSCI LatAm                    2860.57      0.53
                                        
 Brazil Bovespa               95003.54      0.63
                                        
 Mexico IPC                          -         -
                                        
 Chile IPSA                    5396.76     -0.56
                                        
 Argentina MerVal                    -         -
                                        
 Colombia IGBC                       -         -
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    3.7176     -0.20
                                        
 Mexico peso                   19.0558      0.18
                                        
 Chile peso                     655.65      0.33
                                        
 Colombia peso                 3110.04      0.17
 Peru sol                            -         -
                                        
 Argentina peso                      -         -
 (interbank)                            
                                        
 


($1 = 3.7125 reais)

 (Reporting by Susan Mathew in Bengaluru;)
  
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