April 17, 2019 / 3:29 PM / 3 months ago

EMERGING MARKETS-Most Latam currencies rise as dollar weakens

    By Susan Mathew
    April 17 (Reuters) - Most Latin American currencies firmed
on Wednesday as the dollar weakened after upbeat economic data
from China eased some fears of a slowdown in its economy.
    Currencies of Mexico, Chile and Colombia
 strengthened between 0.2 percent and 0.4 percent, but
Brazil's real weakened 0.6 percent and hit a two and a
half week low.  
    The dollar lost ground after China reported unexpected 
economic growth in the first quarter, adding to positive
economic data out of the country since late last week.
    Argentina's peso recovered from Tuesday's falls as
the government announced new measures on Wednesday, including a
freeze on prices on public services, in a bid to contain
inflation ahead of upcoming elections in October.
    Data showing inflation rose for the third straight month 
hit the peso on Tuesday, and prompted the central bank to take
action. 
    The bank said it would reinforce the "contractionary bias"
of monetary policy, which includes freezing a non-intervention
peso trading range until year-end and holding off from buying
dollars to rein in the currency if it strengthens outside the
range until the end of June.
    "Although such a measure is net positive for ARS, it is very
unlikely to change ARS direction in the medium term," Morgan
Stanley analysts said in a note, using ARS to refer to
Argentina's peso. 
    "With inflation still running at very high levels and polls
pointing to a very tight electoral race, markets will very
likely keep pricing a non-negligible probability of a
non-orthodox outcome in the presidential election," they said. 
    Among regional stocks, Brazil's Bovespa slipped 0.6
percent after rising at the start of the session, while
state-oil firm Petrobras and iron ore mining major
Vale also gave up early gains.  
    The country's government officials said Petrobras'
market-based diesel pricing policy remains unchanged and
Brazil's president has no intention of meddling in its internal
affairs.
    This comes after the company delayed a diesel price hike
after a call from Brazilian President Jair Bolosnaro.
    Vale said it expects to resume operations at its largest
mine in Minas Gerais state, an announcement that led to a slump
in iron ore prices.
    Colombian stocks touched a five-week low with shares
of state-run oil company Ecopetrol sliding 7 percent. 
    The company said on Tuesday it is working to contain two oil
spills from its Cano Limon pipeline, which was damaged by bomb
attacks on the weekend.
    Meanwhile, Mexican shares rose 0.4 percent with
Santander Mexico's shares among the top gainers. 
    
    
    Key Latin American stock indexes and currencies at 1458 GMT:
    Stock indexes           Latest   Daily %
                                      change
 MSCI Emerging Markets      1097.27      0.34
                                     
 MSCI LatAm                 2749.96     -0.65
                                     
 Brazil Bovespa            93868.74     -0.49
                                     
 Mexico IPC                45202.02      0.43
                                     
 Chile IPSA                 5260.55     -0.01
                                     
 Argentina MerVal          32324.55      0.11
                                     
 Colombia IGBC             12793.21     -1.26
                                     
                                             
       Currencies           Latest   Daily %
                                      change
 Brazil real                 3.9232     -0.59
                                     
 Mexico peso                18.8200      0.27
                                     
 Chile peso                   659.3      0.50
                                     
 Colombia peso              3155.83      0.16
 Peru sol                     3.294      0.06
                                     
 Argentina peso             41.4500      2.29
 (interbank)                         
                                     
 

 (Reporting by Susan Mathew in Bengaluru;)
  
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