January 6, 2020 / 7:57 PM / 22 days ago

EMERGING MARKETS-Mexican peso rises; Colombian shares hit 5-yr high

 (Updates prices)
    By Susan Mathew
    Jan 6 (Reuters) - The Mexican and Colombian pesos ticked up
on Monday against the dollar, which remained pressured by
escalating tensions between the United States and Iran after the
killing of a top Iranian general, while stocks in Colombia
jumped 1%. 
    The killing of Iranian Major-General Qassem Soleimani last
week saw investors favor the Japanese yen and the Swiss franc,
leaving an index of the dollar against a basket of rivals
down 0.2%.
    Some emerging market currencies rose against the dollar,
with South Africa's rand and Russia's rouble
gaining over 0.5% each, while the Mexican and Colombian
pesos rose more than 0.3%. Brazil's real traded
steady.
    Chile's peso, however, fell 1.2% to hit an over
three-week low, extending losses to a second session.
    Assets across the developing world had a solid end to 2019,
helped by the cooling of trade tensions between Washington and
Beijing, but rising geopolitical uncertainties have caused
increased volatility at the beginning of the new year.
    Looking into the second half of the year, analysts warned
Mexico's peso could be headed for choppy waters as the U.S.
presidential election campaign could see President Donald Trump
resort to using Mexico as a verbal pinata on issues of trade and
migration to stoke his base.
    In Brazil, President Jair Bolsonaro told journalists on
Monday that his administration will likely submit to the
Congress in February a reform to reduce the size of the
government, aiming to cut public spending.
    But data on Monday showed economic activity in December grew
at its slowest pace in six months as a slight improvement in the
services sector failed to compensate for a more disappointing
performance in manufacturing.
    Regional shares painted a mixed picture, in line with a
choppy session on Wall Street.
    The surge in Colombian shares to their highest
since September 2014 was thanks to a 1.8% rally in heavily
weighted Ecopetrol which tracked a rise crude prices.
 
    Chile's main index touched a three-week peak,
extending gains to a third straight session. 
    "We don't think the newest flashpoint will derail the green
shoots emerging in the global economy and yet it's powerful
enough to trigger a positioning squeeze, especially in
equities," Mark McCormick global head of FX strategy at TD
Securities, wrote in a note.   
    Shares listed in Mexico fell 0.3%, while Brazil's
Bovespa index slipped 0.8%. 
    
    Key Latin American stock indexes and currencies at 1930 GMT:
    Stock indexes             Latest    Daily %
                                         change
 MSCI Emerging Markets         1112.19     -1.04
                                        
 MSCI LatAm                    2933.09     -1.19
                                        
 Brazil Bovespa              116712.92     -0.84
                                        
 Mexico IPC                   44498.62     -0.28
                                        
 ṅChile IPSA                   4885.46      0.95
                                        
 Argentina MerVal             41322.99     2.034
                                        
 Colombia COLCAP               1676.49      1.07
                                        
                                                
       Currencies             Latest    Daily %
                                         change
 Brazil real                    4.0719     -0.42
                                        
 Mexico peso                   18.8620      0.29
                                        
 Chile peso                      772.5     -2.11
                                        
 Colombia peso                 3244.21      0.18
 Peru sol                        3.324     -0.27
                                        
 Argentina peso                59.8150      0.00
 (interbank)                            
                                        
 
 (Reporting by Susan Mathew in Bengaluru; Editing by Cynthia
Osterman)
  
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