February 3, 2020 / 3:28 PM / 2 months ago

EMERGING MARKETS-Chilean peso leads charge in Latam FX after upbeat economic data

    * Chilean peso set to snap three-day losing streak 
    * Brazil manufacturing PMI rises in January
    * Buenos Aires races to seal 2021 bond deal
    * Mexican markets shut on Monday 

    By Shreyashi Sanyal
    Feb 3 (Reuters) - Latin American currencies bounced higher
on Monday, led by Chile's peso as data showed economic activity
in the country picked up in December even as fears around the
coronavirus epidemic weighed on most other emerging markets.
    The Chilean peso strengthened 0.9% to 792.17 against
the greenback, on track to break a three-day losing streak after
central bank figures showed a 1.1% rise in the country's
economic activity during December.
    The peso touched historic lows last year after months of
violent anti-government protests but the latest reading on the
economy was supported by a resilient mining sector.    
    "Mining and manufacturing boost industrial production and 
labor market shows signs of resilience after social outbreak (in
Chile)," analysts at Scotiabank wrote in a note. 
    "As of December 2019, there was greater optimism in
international trade, given the imminent signing of phase one of
the U.S.-China trade agreement."
    MSCI's index for Latin American currencies
rose 0.8% after two straight days of declines. 
    Emerging markets in Asia came under pressure from a 7.8%
drop in China shares as investors feared the virus outbreak
would hit demand.  
    Brazil's real also rose, bouncing back from a record
low in the previous session. A survey of purchasing managers'
activity showed growth in Brazil's manufacturing sector picked
up in January. 
    However, a central bank survey of economists showed the
real's slide to its weakest level on record is not fueling
expectations of higher domestic inflation or interest rates.

    In Argentina, Buenos Aires province has offered to make a
$75 million capital payment on a 2021 bond, a last-gasp move to
encourage holders of the debt to accept its proposal to delay a
larger repayment and avoid the risk of falling into default.

    The Argentine peso eased slightly against the dollar.
    Stocks in Brazil and Chile also rose on
the day.        
    A market holiday in Mexico kept its peso little
    Key Latin American stock indexes and currencies at 1459 GMT
   Stock indexes               Latest         Daily %
 MSCI Emerging Markets            1061.79          -0.05
 MSCI LatAm                       2797.04           1.65
 Brazil Bovespa                 114824.38           0.94
 Mexico IPC                             -              -
 Chile IPSA                       4589.29           0.38
 Argentina MerVal                40479.51          0.934
 Colombia COLCAP                  1631.88            0.5
       Currencies              Latest         Daily %
 Brazil real                       4.2310           1.28
 Mexico peso                      18.7323           0.55
 Chile peso                         786.5           1.60
 Colombia peso                    3395.28           0.64
 Peru sol                           3.372           0.36
 Argentina peso                   60.4200          -0.12

 (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Dan
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